Many places also raise their wage floors later in the year, so the U.S. is bound to see even more localities getting closer to $20 per hour by the end of 2025. “This adds complexity in tracking employee work locations and meeting local compliance obligations for minimum wage,” Johnson said. But the minimum-wage level may still be too low to keep up with rising prices and home costs, according to EPI. That’s especially the case if a locality’s minimum wage was tied to inflation years ago and has not been reexamined since.
Which states have minimum wages of $15.00 or more?
Each tier establishes its standards, contributing to a nuanced landscape that impacts workers across the United States. If the federal minimum wage rate is increased to levels above the state minimum, the state wage will match the federal rate, and annual increases based on the consumer price index will continue. While the federal minimum wage has remained $7.25 per hour since 2009, states and cities across the country have been raising their minimum wages to ensure their residents can make a more sustainable living. Tip credit is not permitted unless the employer obtains from each employee, either monthly or each pay period, a signed certification of the amount of tips retained earnings balance sheet received. Employers must notify employees in advance of the amount of cash wages they will be paid and the amount that wages will be increased using the tip credit. You’ve got federal rules on one hand and state-specific guidelines on the other.
- Keeping up with these changes almost every year can be challenging, especially if you have employees in multiple states.
- This bill also establishes a Fast Food Council in the state, which has the power to raise the minimum wage going forward.
- GOBankingRates works with many financial advertisers to showcase their products and services to our audiences.
- In Massachusetts, where the tipped minimum wage is $2.63, the average income of tipped waiters and waitresses is $12.88.
- Keep in mind this list doesn’t consider every city or municipality with its own minimum wage requirement.
- However, employers covered by the FLSA must adhere to the federal requirement of $7.25.
Sending you timely financial stories that you can bank on.
Exploring how race, ethnicity, and class intersect to affect economic outcomes in the United States. Join our webinar for a look at some of 2025’s workplace compliance trends and ways you can prepare for the changes to come. Additionally, states may have different regulations regarding exemptions and special provisions, impacting various categories of workers.
What Are Minimum Wage Laws and Why Do They Change?
However, concerns about price hikes, automation, or reduced hours always arise. Like any policy, it’s a balancing act—ask a small café owner trying to keep the lights on while paying staff a fair wage. Surprising as it is, several states don’t have their own laws setting a wage floor. These include Alabama, Louisiana, Mississippi, South Carolina, and Tennessee. In these places, businesses pay the federal wage of $7.25 an hour for eligible workers. If you’re employed in one of these states and hear people chatting about “state minimum wage,” they’re likely referring to $7.25.
This is the first increase following the final part of a series of increases in the state’s minimum wages that began on December 31, 2016. States with higher minimum wage rates include Washington at $16.66 and the District of Columbia at $17.50. Cities with minimum wage rates higher than those of their states include New York City ($16.50 — $1 more than in New York State) and Portland, Maine ($15.50, $0.85 higher than the state). Businesses that operate in multiple states must comply with the minimum wage requirement across all the states minimum wage around the us they have locations in. This can create administrative challenges as they need to track and implement different minimum wage rates.
With seamless time tracking, you can easily estimate task durations, set clear budgets, and generate detailed reports inside Asana, Trello, Jira, or any other pm tool. Everhour stands out as one of the best time tracking software tools, providing precise and efficient tracking of work hours. California, Connecticut, Massachusetts, and Washington are the states with a minimum wage of $15 per hour or above. Combined cash & tip minimum wage rate is $14.00 with maximum tip credit of $1.25. Restaurant and hotel workers working a 7th day consecutively will have those hours treated as overtime.
Tipped minimum wage law in the United States
The minimum wage for the state of Illinois increased by $1 from $14 to $15 on January 1, 2025, which means it finally reached the threshold following a series of increases that began in 2019. In some cases, meals or lodging can be used to meet part of the minimum wage obligation. This can only be done if agreed upon by the employer and employee and supplemented with a voluntary written agreement. The amounts credited to the employee’s minimum wage are also limited based on the information found via this official notice. From recruiting and onboarding to people management, compliance, and more, we provide technology and expertise to help business leaders solve problems and grow their businesses.
Topics covered
- The state minimum wage law applies only to employers with six or more employees and to state agencies.
- This pay increase should be reflected in the employee’s pay stub on the next scheduled pay date.
- According to the Department of Labor (DOL), the minimum wage for tipped employees is $2.13 per hour in direct wages.
- The State law excludes from coverage any employment that is subject to the federal Fair Labor Standards Act.
- In Rhode Island, full-time students under the age of 19 who work for nonprofit religious, education, library, or community service organizations are entitled to a minimum wage rate of $11.70.
- Employers must also display new labor law posters as a notice to employees in the workplace when laws like minimum wage change.
Non-exempt employees typically include your hourly and blue-collar workers making less than $684 per week. The federal minimum wage and FLSA require that the vast majority of employees https://www.bookstime.com/ regardless of state (with few exceptions), make a minimum of wage $7.25 per hour. If a state has no minimum wage requirement or law, or the minimum wage required by the state is lower than the federal minimum wage, then the federal minimum wage typically always applies for that state. Time and one-half premium pay for work on Sundays and holidays in retail and certain other businesses is required under two laws that are separate from the minimum wage law.