Minimum Wage Changes Coming in 2023
Being an employer has never been so complex. With rapidly changing tax laws, state-mandated benefits, and changes in wage and hour laws, there is a lot to keep track of to stay compliant. Minimum wage is a hot topic and many states are making changes to their minimum wage laws beginning in 2023. Here is a comprehensive list of changes that have been announced.
Minimum Wage Changes Coming in 2023 By State
Alaska – Alaska’s hourly minimum wage will increase from $10.34 to $10.85, effective January 1, 2023.
Arizona – Arizona’s hourly minimum wage will increase $1.05, from $12.80 to $13.85, effective January 1, 2023. In addition, the hourly tipped minimum wage will rise from $9.80 to $10.85, based on a $3 hourly tip credit.
California – In a July 27 notice the state finance department indicated that, effective Jan. 1, 2023, California’s state hourly minimum wage rate will rise to $15.50. This increase applies to all employers, regardless of the number of employees they employ.
California city, Burlingame – The hourly minimum wage in Burlingame, California, will rise from $15.60 to $16.47, effective January 1, 2023.
California city, Daly City – The hourly minimum wage in Daly City, California, will rise from $15.53 to $16.07, effective January 1, 2023, for all employees working at least two hours per week in the city.
California city, Los Altos – The hourly minimum wage in Los Altos, California, will rise from $16.40 to $17.20 effective Jan. 1, 2023. Per the city’s minimum wage ordinance, the wage applies to employees working two or more hours in the city in a calendar week, tips not included.
California city, Malibu – Effective July 1, 2023, Malibu, California, will raise its hourly minimum wage nearly a dollar, from $15.96 to $16.90. The minimum wage applies to employees working at least two hours in the city per week.
California city, Petaluma – Effective Jan, 1 2023, the hourly minimum wage in the city of Petaluma, CA will rise from $15.85 to $17.06, regardless of employer size.
California city, Richmond – Effective January 1, 2023, the hourly minimum wage in Richmond, California, will rise to $16.17 from $15.54 for employees working at least two hours in the city in a calendar week.
California city, San Carlos – The hourly minimum wage in San Carlos, California, will rise from $15.77 to $16.32, effective January 1, 2023.
California city, San Diego – Effective January 1, 2023, minimum wage in San Diego, CA will increase from $15 to $16.25 for employees who work in San Diego for at least two hours in one or more weeks of the calendar year.
California city, San Jose – The hourly minimum wage in San Jose, California, will rise from $16.20 to $17.00, effective Jan. 1, 2023. Per the city’s minimum wage ordinance, the wage applies to employees working two or more hours in the city in a calendar week, tips not included. An updated poster reflecting the increased minimum wage is expected to be released around December 1.
California’s current statewide hourly minimum wage is $15.00 for employers with at least 26 employees and $14.00 for employers with fewer than 26 employees. The state minimum wage will rise to $15.50 for all employers effective January 1, 2023.
California city, West Hollywood – Hourly minimum wage will increase to $19.08 for all employers effective July 1, 2023.
Colorado – Governor Polis and the Department of Labor and Employment (CDLE) Division of Labor Standards and Statistics (DLSS) announced an increase to Colorado’s minimum wage, which is currently $12.56 per hour for 2022, and will increase to $13.65 per hour in 2023, an 8.68% increase. The new minimum wage will take effect on January 1, 2023.
Delaware – Not less than $11.75 per hour effective, January 1, 2023
D.C. – Effective July 1, 2023, the minimum wage in the District of Columbia will increase from $16.10 per hour to $17.00 per hour for all workers, regardless of size of employer.
Federal Contractors – The DOL Wage and Hour Division has announced the minimum wage rate for workers performing work on or in connection with federal contracts covered by Executive Order 13658, “Establishing a Minimum Wage for Contractors,” for 2023. Starting January 1, 2023, the rate will increase to $12.15 per hour, while the required minimum cash wage that generally must be paid to tipped employees under covered contracts will increase to $8.50 per hour.
Maine – The hourly minimum wage in Portland, Maine, will rise to $14 for nonservice employees and to $7 for service employees effective January 1, 2023.
Michigan – A Michigan Court of Appeals panel has reversed a lower court decision that would have led to Michigan’s hourly minimum wage to rise to $13.03 on February 19. The minimum wage rate of $10.10 will therefore remain in effect for 2023.
Minnesota – To help minimum-wage workers keep up with inflation and better provide for themselves and their families, Minnesota’s minimum-wage rates will be adjusted 2.5 percent beginning Jan. 1, 2023. This will result in a 26 cent increase to the current large-employer minimum wage of $10.33, and a 21 cent increase to the other state minimum-wage of $8.42, which includes wages for small-employers, youth and training, and summer work travel exchange visitor programs. These state minimum-wage rates, however, will not apply to work performed in the cities of Minneapolis and St. Paul, which already have higher minimum-wage rates.
Minnesota city, Minneapolis – Up from the current $15.00 an hour, Minneapolis’ hourly minimum wage rate for large businesses will increase to $15.19 beginning Jan. 1, 2023. The hourly minimum wage for small businesses will next increase on July 1, 2023, when it is scheduled to rise to $14.50 from $13.50. Under the city’s minimum wage code, employers with more than 100 employees constitute a large business, whereas those with 100 or fewer employees are considered small businesses.
Missouri – Missouri’s hourly minimum wage will increase from $11.15 to $12.00, effective January 1, 2023.
Montana – Montana’s minimum wage will increase to $9.95 effective January 1, 2023, an increase from the current rate of $9.20, according to the Montana Department of Labor and Industry.
New Jersey – Beginning January 1, 2023, New Jersey’s hourly minimum wage for employers with at least six employees will rise from $13 to $14.13, and the hourly minimum wage for seasonal employers and employers with fewer than six employees will rise from $11.90 to $12.93. Employees who work on a farm for an hourly or piece-rate wage will see their minimum hourly wage increase to $12.01, up from $11.05. Additionally, long-term care facility direct care staff will see their minimum wage rise by $1.13, to $17.13.
Tipped workers’ cash wage will increase to $5.26/hour, with employers able to claim an $8.87 tip credit, an increase in the maximum allowable tip credit of $1. If the minimum cash wage plus an employee’s tips do not equal at least the state minimum wage, then the employer must pay the employee the difference.
New Mexico city, Albuquerque – The city of Albuquerque, New Mexico, will increase its hourly minimum wage from $11.50 to $12.00, effective January 1, 2023.
New Mexico city, Las Cruces – The city of Las Cruces, New Mexico, announced that it will adopt the state’s $12 minimum wage, effective January 1, 2023.
New York (outside of New York City, Long Island, and Westchester County) – The minimum wage for New York workers outside of New York City, Long Island and Westchester County will increase to $14.20 on December 31, 2022.
Ohio – The Ohio Department of Commerce as announced that the minimum wage will increase to $10.10 per hour effective January 1, 2023. The minimum wage for tipped employees will also increase to $5.05. In 2023, the minimum wage applies to employees of businesses with annual gross receipts of $371,000 or more per year.
For employees at smaller companies with annual gross receipts of less than $371,000 per year after Jan 1. 2023, and for 14- and 15-year-olds, the state minimum wage is $7.25 per hour. For these employees, the state wage is tied to the federal minimum wage of $7.25 per hour.
Rhode Island – Rhode Island Governor McKee has approved a bill that will raise the minimum wage in the state to $15.00 by 2025. The minimum wage will increase on the following schedule: $12.25 eff. 1-1-2022; $13.00 eff. 1-1-2023; $14.00 eff. 1-1-2024; and $15.00 eff. 1-1-2025.
South Dakota – The South Dakota Department of Labor has announced that the minimum wage will increase to $10.80 in 2023, up from the current rate of $9.95.
Vermont – Vermont’s hourly minimum wage will increase from $12.55 to $13.18, effective January 1, 2023.
Washington – The Washington State minimum wage for 2023 will increase to $15.74 an hour in January. That’s up $1.25 from what it is now.
What We Can Help With
We know that as an employer you have a lot to keep track of with regard to payroll regulations, benefits, and employer mandates to stay compliant. It can be time-consuming and stressful to understand what the government agency is requiring. It is also hard to know how the changes should be implemented in your company. As part of our full-service partnership, we help you stay up-to-date with all of the new rules and regulations so you can focus on growing your company. For example:
- Sick Pay
- Paid Family Leave
- State Mandated Retirement Plans
- ACA Tracking
- Wage and Hour Laws related to payroll
Read more about our Back Office support for staffing firms here.
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Source: Wolters Kluwer, VitalLaw
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