Twenty-three states throughout the country are increasing their minimum wage rates starting on January 1, 2023.  Many of these increases are due to the 8.7% increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).  In addition, several municipalities are increasing their minimum wage.  Here is a list of those changes:

Alaska

Alaska changed from scheduled rate increases to ones based on the Consumer Price Index for urban consumers in the Anchorage metropolitan area (Anchorage CPI-U) for the preceding calendar year.  As a result, the Anchorage CPI-U increased by 4.9 percent in 2021.

The minimum wage is $10.85/hour.  There is no separate rate for tipped employees.

Arizona

The minimum wage increased by $1.05/hour to $13.85/hour, $10.85 for tipped workers.

California

Previously, California had separate rates for large and small employers.  That changed for 2023.  An accelerated increase is required when inflation exceeds 7 percent using the CPI-W.  As stated earlier, the CPI-W increased by 8.7%.

The new state minimum wage is $15.50/hour.

Cites

Several cities in California are increasing their minimum wage effective January 1, 2023.

  • Belmont – $16.75/hour
  • Burlingame – $16.47/hour
  • Cupertino – $17.20/hour
  • Daly City – $16.07/hour
  • East Palo Alto – $16.50/hour
  • El Cerrito – $17.35/hour
  • Foster City – $16.50/hour
  • Half Moon Bay – $16.45/hour
  • Hayward – $16.34/hour (large employers, 26 or more employees); $15.50/hour (small employers, 25 or fewer employees)
  • Los Altos – $17.20/hour
  • Menlo Park – $16.20/hour
  • Mountain View – $18.15/hour
  • Novato – $16.32/hour (100 or more employees); $16.07/hour (large, 26-99 employees); $15.53/hour (small, 1-25 employees)
  • Oakland – $15.97/hour; $17.37/hour (hotel workers with health benefits); $23.15/hour (hotel workers without health benefits)
  • Palo Alto – $17.25/hour
  • Petaluma – $17.06/hour
  • Redwood City – $17/hour
  • Richmond – $16.17/hour
  • San Carlos – $16.32/hour
  • San Diego – $16.30/hour
  • San Jose – $17/hour
  • San Mateo – $16.75/hour
  • Santa Clara – $17.20/hour
  • Santa Rosa – $17.06/hour
  • Sonoma – $17/hour (large employers, 26 or more employees); $16/hour (small employers, 25 or fewer employees)
  • South San Francisco – $16.70/hour
  • Sunnyvale – $17.95/hour
  • West Hollywood – $16.50/hour (large employers, 50 or more employees); $16/hour (small employers, 49 or fewer employees); $17.64/hour (hotel workers)

Colorado

The minimum wage is $13.65/hour, $10.63/hour for tipped workers.

In addition, the minimum wage in Denver increases to $17.29/hour, a $1.50/hour increase from 2022.

Deleware

Senate Bill 15, signed into law on July 21, 2022, moves the minimum wage in stages to $15/hour by 2025.  The second increase starts January 1, 2023, at $11.75/hour; Tipped employees still are at the federal rate of $2.23/hour.

Illinois

Illinois is also scheduled to bring the minimum wage to $15/hour by 2025. The minimum wage is $13/hour, $7.80/hour for tipped workers.

Maine

The minimum wage is $13.80/hour, $6.90/hour for tipped workers.

Maryland

Maryland’s minimum wage rates are:

  • $12.80/hour (small employers, 14 or fewer employees)
  • $13.25/hour (large employers, 15 or more employees)

Tipped employees remain at $3.63/hour.

Massachusetts

Massachusetts becomes the third state to break the $15/hour threshold.  The minimum wage is $15/hour, $6.75/hour for tipped workers.  Massachusetts currently does not have any CPI increases planned for future years.

Michigan

The minimum wage is $10.10/hour, $3.84/hour for tipped workers, as set forth by the Improved Workforce Opportunity Wage Act of 2018. In addition, the training wage of $4.25/hour for newly hired employees ages 16 to 19 for their first 90 days of employment remains unchanged.

This initiative initially sought to increase the minimum wage to $12 an hour by 2022 and raise the minimum wage for tipped workers to 80% of the standard minimum wage in 2022, 90% in 2023, and ultimately match it in 2024.  However, the Michigan legislature amended the initiative, putting in lower wage thresholds that increased the minimum wage to $12.05 by 2030 instead of 2022 and kept the tipped minimum wage at 38% of the standard rate.  This action by the Michigan legislature was found to be unconstitutional by the Michigan Court of Claims.  The Court entered an order staying the effect of this decision until February 19, 2023, to give employers and the relevant state agencies time to accommodate the changes required by the ruling.  The Court of Claims’ order has been appealed.  Pending the final resolution of the appeal and lifting of the stay, under the potential implementation of the adopted initial petition, the minimum wage rate for 2023 would be $13.03 and $11.73 for tipped employees.

Minnesota

Minnesota’s minimum wage rates are tied to employers’ gross receipts.  Companies with $500,000 or more are large; those with less than $500,000 are small.

In 2023, minimum wage rates in Minnesota are $10.59/hour (large employers); $8.63/hour (small employers), a 2.5% increase from 2022.

Missouri

The minimum wage is $12/hour, $6/hour for tipped workers (half the minimum wage).  Starting in 2024, Missouri will move to indexed increases.

Montana

The minimum wage is $9.95/hour for all employees.

Nebraska

Nebraska approved a ballot measure to increase the minimum wage to $15/hour by 2026.  The first increase sets the minimum wage at $10.50/hour, $2.13/hour for tipped workers (federal standard).

New Jersey

New Jersey’s minimum wage rates are:

  • $12.93/hour (small employers, five or fewer employees)
  • $14.13/hour (large employers, six or more employees)

For tipped employees in 2023, New Jersey’s rates are:

Small – $2.13 (remains the same)
Large – $5.26

New Mexico

The minimum wage is $12/hour, $3/hour for tipped workers.

New York

New York’s minimum wage changes on December 31, 2022, to the following:

  • $14.20
  • $11.85 (tipped service employees)
  • $9.45 (tipped food service workers)

Ohio

Ohio’s minimum wage rates are tied to employers’ gross receipts. Employers with gross receipts of $372,000 or more must pay a minimum wage of $10.10/hour.  Companies with less than $372,000 pay the federal minimum wage of $7.25/hour.  Tipped workers earn $5.05/hour.

Rhode Island

Rhode Island passed legislation to increase the minimum wage to $15/hour by 2025.  This increase starts with the minimum wage being $13/hour for 2023 and increasing by $1/hour the next couple of years.  Tipped employees remain the same at $3.89/hour.

South Dakota

The minimum wage is $10.80/hour, $5.40/hour for tipped workers (half the minimum wage)

Virginia

The minimum wage is $12/hour, $2.13/hour for tipped workers (federal level)

Vermont

The minimum wage is $13.18/hour, $6.59/hour for tipped workers

Washington

The minimum wage is $15.74/hour.  This rate is the highest state minimum wage in the country.

  • Seattle – $18.69/hour (large employers with 501 or more employees and small employers of 500 employees or fewer employees who do not pay $2.19/hour toward medical benefits); $16.50 (500 employees or fewer employees and pay $2.19/hour toward medical benefits)
  • SeaTac – $19.06/hour for hospitality and transportation industry employers.
  • Tukwila – Passed an ordinance to have their minimum wage match SeaTac’s minimum wage for all large employers (more than 500 employees worldwide, including all franchisees).  This ordinance starts July 1, 2023.

What to do next

If your company is affected by minimum wage changes, notify your workforce management and payroll company as soon as possible.  These laws affect payroll, reporting, and forecasting.  If you need help, please contact Time Equipment Company at sales@timeequipment.com or 800-997-8463.

*This information simplifies complex Acts as it is understood by Time Equipment Company. It is not to be taken as legal advice. The regulations for this program are changing. For further information contact your state or local Department of Labor.