More than Half of U.S. States to Institute a Minimum Wage Increase in 2022
Several other states have increases set to take effect in later years
NEW YORK, Dec. 15, 2021 /PRNewswire/ -- Numerous states and several cities across the U.S. are just days away from implementing changes in minimum wage, according to payroll experts at Wolters Kluwer Legal & Regulatory U.S. A total of 26 states have announced raises in minimum wage in 2022, with 22 of those states implementing the increases on January 1. Wolters Kluwer has prepared a comprehensive analysis of legislative updates to outline the states and cities that will raise their minimum wage in coming years.
"These minimum wage increases indicate moves toward ensuring a living wage for people across the country," said Deirdre Kennedy, senior payroll analyst at Wolters Kluwer Legal & Regulatory U.S. "In addition to previously approved incremental increases, the change in presidential administration earlier this year and the ongoing coronavirus pandemic have also contributed to these changes."
Key takeaways from the analysis of upcoming minimum wage changes include:
- West Hollywood, CA will have the highest minimum wage rate in the country, at $17.64 per hour for hotel workers, effective January 1, 2022. The increase was approved by city council in November. Also effective January 1 is the minimum wage for large non-hotel employers, which will be $15.50 ($16.50 effective July 1, 2022), and $15.00 ($16.00 effective July 1, 2022) for small non-hotel employers in West Hollywood.
- The highest state rate is in California, at $15.00 per hour, and parts of New York (namely New York City as well as Nassau, Suffolk, and Westchester counties) also have a $15 minimum wage. Following close behind are the Portland Metro Area in Oregon at $14.75 effective July 1, 2022, and Washington state at $14.49 effective January 1, 2022. The District of Columbia's minimum wage is $15.20.
- Ten more states have scheduled incremental increases that will bring their minimum wages to $15 per hour within the next few years. These states include Connecticut and Massachusetts by 2023; New Jersey by 2024; Delaware, Illinois, Maryland (large employers), and Rhode Island by 2025; and Florida and Maryland (small employers) by 2026. Pennsylvania will also reach $15 per hour for employees under the Governor's jurisdiction by 2024.
- On April 27, 2021, President Biden signed an Executive Order requiring federal contractors to pay a $15 minimum wage to workers on federal contracts. Starting January 30, 2022, all agencies will need to incorporate a $15 minimum wage in new contract solicitations, and by March 30, 2022, all agencies will need to implement the minimum wage into new contracts. Agencies must also implement the higher wage into existing contracts when the parties exercise their option to extend such contracts, which often occurs annually. Final regulations implementing the Executive Order were issued by the Department of Labor on November 24, 2021 (86 FR 67126.)
- Puerto Rico's minimum wage will be increasing for the first time since 2009, when the federal minimum wage rate was set at $7.25. The minimum wage for workers in Puerto Rico will increase to $8.50 on January 1, 2022 (Act. No. 47-2021, L. 2021.).
- While some states and localities have far exceeded the federal minimum wage, some remain on the lower end of the spectrum, with some state minimums coming in below the federal wage rate, and others with a slower incremental increase. In response to this and to a competitive job market, some organizations operating in multiple states have taken to setting their own minimum wages. Companies such as Costco, Chipotle, Wells Fargo, Aetna, and Walmart have implemented minimum wage rates for their employees, some of which exceed the highest state rate. Costco, for instance, recently increased the minimum wage for its U.S. workers from $16 to $17 per hour. Companies report a number of benefits from offering a higher rate, including improved customer service, happier workers, savings, and more professional candidates seeking to work for them.
Please see the Wolters Kluwer Legal & Regulatory U.S. analysis on upcoming state minimum wage changes below:
Arizona |
$12.80 per hour, up from $12.15 per hour. |
California |
$15.00 per hour, for businesses with 26 or more employees; $14.00 for smaller employers. The minimum wage for small employers will reach $15 in 2023. |
Colorado |
$12.56, up from $12.32. |
Connecticut |
$13 per hour, scheduled to increase to $14 on July 1, 2022. The minimum wage is scheduled to reach $15 per hour in 2023. |
Delaware |
$10.50 per hour, up from $9.25, pursuant to legislation signed in July 2021 that will increase the minimum wage to $15.00 by 2025 (S.B. 15, L. 2021). |
Florida |
$10.00 per hour, up from $8.65. Wage rates are adjusted annually based on inflation. A constitutional amendment approved by voters in the November 3, 2020, General Election will increase the minimum wage to $11.00 on September 30, 2022, and to $15.00 by 2026. |
Illinois |
$12.00 per hour, up from $11.00. The minimum wage is scheduled to reach $15 in 2025. |
Maine |
$12.75 per hour, up from $12.15. |
Maryland |
In 2022, the minimum wage is $12.50 for large employers and $12.20 for small employers, increasing at different increments to reach $15 in 2025 for large employers and in 2026 for small employers. |
Massachusetts |
$14.25 per hour, an increase of 75 cents. The minimum wage is scheduled to reach $15.00 by 2023. |
Michigan |
$9.87, up from $9.65 per hour. |
Minnesota |
$10.33 per hour (up from $10.08) for employees of large employers with an annual gross volume of sales not less than $500,000. Small employers must pay employees a minimum wage of at least $8.42 per hour (up from $8.21). |
Missouri |
$11.15, up from $10.30 per hour. The state minimum wage will reach $12.00 per hour in 2023. |
Montana |
$9.20 per hour, up 45 cents, based on a 5.25% change in the cost of living and rounded to the nearest 5 cents. Wage rates are adjusted annually based on inflation. |
Nevada |
$9.75 per hour for employees who do not receive health benefits, to increase to $10.50 on July 1, 2022. $8.75 per hour for employees who do receive health benefits, to increase to $9.50 on July 1, 2022. |
New Jersey |
$13.00 per hour for most employees, up from $12.00 per hour. $11.90 per hour for those in seasonal employment, who work on a farm for an hourly or piece-rate wage, or who work for an employer with fewer than six employees. The minimum wage is scheduled to reach $15.00 for most employees in 2024, and for those in seasonal employment, who work on a farm for an hourly or piece-rate wage, or who work for an employer with fewer than six employees in 2026. The minimum wage for direct-care workers in long-term health care facilities is $3 higher than the state minimum wage (A 4482, L. 2020). |
New Mexico |
$11.50 per hour, up from $10.50. The minimum wage will be $12.00 in 2023. |
New York |
Tiered/Rates vary by region: $15 per hour in New York City and in Nassau, Suffolk, and Westchester counties; $12.50 per hour in the remainder of the state.
The piece rate for Agricultural workers must be equivalent to the basic minimum wage, unless a youth rate certificate is issued (wage rate then must be equivalent to the youth rate). The minimum wage for workers in fast food establishments is $15 per hour in all of New York state. The minimum wage at all airports (LaGuardia, JFK, and Newark Liberty International) is $18.00, and will reach $19 in 2023. |
Ohio |
$9.30 per hour, up 50 cents from $8.80 per hour, based on a 5.8% increase in the cost of living. Wage rates are adjusted annually based on inflation. The minimum wage rate applies to employees of businesses with annual gross receipts of $342,000 per year (changed from $323,000 in 2021). For employees at smaller companies and for 14- and 15-year-olds, the state minimum wage is $7.25 per hour, which is tied to the federal rate. |
Oregon |
The state minimum wage is tiered, with the highest rate in the Metro Portland area at $14.00 per hour ($14.75 effective July 1, 2022), the lowest in rural (non-Urban) areas at $12.00 per hour ($12.50 effective July 1, 2022), and a minimum wage of $12.75 per hour ($13.50 effective July 1, 2022) in the rest of the state. |
Pennsylvania |
$7.25 per hour, but $14.00 for employees under Governor's jurisdiction. |
Rhode Island |
$12.25 per hour up from $11.50. The state minimum wage will reach $15.00 per hour in 2025. |
South Dakota |
$9.95 per hour, up 50 cents from $9.45 per hour. Wage rates are adjusted annually based on inflation. |
Vermont |
$12.55 per hour. This is an 80-cent scheduled increase over the $11.75 per hour 2021 rate. |
Virginia |
$11.00 per hour, up from $9.50. The increase is part of a series of scheduled increases to reach $15.00 per hour by 2026. |
Washington |
$14.49 per hour, for employees who have reached the age of 18, based on a 5.83% increase in the cost of living.
Workers under 16 years old can be paid 85 percent of the adult minimum wage, or $12.32 per hour, in 2022. |
For More Information
For members of the media interested in additional details on changes to state minimum wage rates or an interview with a payroll expert from Wolters Kluwer Legal & Regulatory U.S., please contact us at [email protected].
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