The minimum wage, established in 1938, is the lowest wage an employer is allowed to pay their employees. It is a legally mandated price floor on labor, intended to protect workers and ensure that they are able to earn a fair wage for their work. The minimum wage is determined by the government and varies depending on the country, state, or region. Because of this, it can be challenging for businesses with employees across multiple states to stay on top of all the minimum wage changes.

Minimum Wage - A Snapshot

Although the past few years have seen plenty of changes in the U.S. workforce, the federal minimum wage has remained constant. The federal minimum wage has been at $7.25 an hour since July 24, 2009, when it was increased from $6.55 an hour.

Regardless of the federal rate, each state can set its own minimum wage for workers, and sometimes these wages can even vary by city and county. State minimum wage rates are typically governed by each individual state’s legislative activities.

According to the Department of Labor (DOL), states have to adhere to the federal minimum wage law if their state minimum wage is lower than the federal rate. Or, if the state minimum wage is greater than the federal minimum wage, then the state rate prevails. Therefore, if a state, city, or county has a minimum wage greater than $7.25, employers are required to pay that higher rate to employees.

With that being said, here are some minimum wage highlights from 2022 along with anticipated state-by-state minimum wage increases to be aware of for 2023.

Highlights from 2022

In 2022, 28 states implemented a higher minimum wage. However, as of Oct. 1, 2022, 13 states were still adhering to the federal standard of $7.25 an hour:

  1. Idaho
  2. Indiana
  3. Iowa
  4. Kansas
  5. Kentucky
  6. New Hampshire
  7. North Carolina
  8. North Dakota
  9. Oklahoma
  10. Pennsylvania
  11. Texas
  12. Utah 
  13. Wisconsin

Ohio is a special case in that the federal rate of $7.25 an hour applies only to employers that gross less than $372,000 annually. Outside of that condition, Ohio’s higher state minimum wage applied. See below for the 2023 minimum wage information for Ohio.

Oklahoma adheres to the federal minimum standard of $7.25 for “Employers of ten or more full-time employees at any one location and employers with annual gross sales over $100,000 irrespective of the number of full-time employees.”

In 2022, there were five states that still didn’t have a minimum wage requirement at all:

  1. Alabama
  2. Louisiana
  3. Mississippi
  4. South Carolina
  5. Tennessee

For states that don’t have a state minimum wage law, the DOL mandates that employers subject to the Fair Labor Standards Act (FLSA) have to pay the federal minimum wage of $7.25 an hour. 

As explained by the National Conference of State Legislatures (NCSL), “States increase their minimum wages for a few different reasons. Some are based on the cost of living, while others are based on previously approved legislation or ballot initiatives.

What’s ahead for 2023

In 2023, 26 states and the territory of Puerto Rico are forecasted to increase their minimum wage requirements. Most changes will go into effect on Jan. 1, 2023, although some changes will become effective later in the year. The new state minimum wages are as follows:

2022 & 2023 comparison

The following chart shows side-by-side comparisons of state minimum wage requirements in 2022 and 2023:
 

State

2022 Minimum Wage Per Hour

2023 Minimum Wage Per Hour

Alaska

$10.34

$10.85

Arizona

$12.80

$13.85

California

$15.00

$15.50

Colorado

$12.56

$13.65

Connecticut

$14.00

$15.00

Delaware

$10.50

$11.75

Florida

$11.00

$12.00

Illinois

$12.00

$13.00

Maine

$12.75

$13.80

Maryland*

$12.50

$13.25

Massachusetts

$14.25

$15.00

Michigan

$9.87

$10.10

Minnesota*

$10.33

$10.59

Missouri

$11.15

$12.00

Montana

$9.20

$9.95

Nebraska

$9.00

$10.50

Nevada*

$10.50

$11.25

New Jersey*

$13.00

$14.13

New Mexico

$11.50

$12.00

New York*

$13.20

$14.20

Ohio*

$9.30

$10.10

Puerto Rico

$8.50

$9.50

Rhode Island

$12.25

$13.00

South Dakota

$9.95

$10.80

Vermont

$12.55

$13.18

Virginia

$11.00

$12.00

Washington

$14.49

$15.74
 

*Maryland: This increased rate applies only to employers with 15 or more employees. There will be a minimum wage of $12.80 for employers with 14 or fewer employees. 

*Minnesota: This increased rate applies only to large employers. There will be a minimum wage of $8.63 an hour for small employers, 90-day learning pay (for employees under 20 years of age), and youth salary (for employees under 18 years of age).

*Nevada: This increased rate applies only to employers that don’t provide health benefits. There will be a minimum wage of $10.25 for employers that do offer health benefits. 

*New Jersey: This increased rate applies to most employers. There will be a minimum wage of $12.93 for seasonal and small employers, $12.01 for farm employees who do hourly work, and $17.13 for direct care staff of long-term care facilities.

*New York: This increased rate applies to most employers in New York state. A minimum wage of $15.00 applies to businesses in New York City as well as Long Island and Westchester County.

*Ohio: This increased rate applies to businesses that gross more than $372,000 annually.

Stay compliant in 2023

No matter where your business is located or operates, it’s important to comply with minimum wage and labor law requirements. Be sure to check your state’s labor department for rates specific to your location (state, city, and county), as well as information about minimum wages for tipped employees.

See here for additional facts and information from the DOL about minimum wage requirements. 

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