OnePoint Human Capital Management Blog

2021 State Minimum Wage Increases

Written by onepoint-admin | Dec 9, 2020 7:12:22 PM

 

Preparing for a 2021 Minimum Wage Increase

 

It's that time of year! Minimum wage increases will happen January 1, 2021 for SEVERAL states, which all have the minimum set higher than the Federal $7.25 level.   In preparation for the increases, review the rate table and perform a basic compensation analysis for other wage scenarios to avoid potential wage and hour risk.

 

Perform a Compensation Analysis

  1. Re-Calculate exempt employees salary requirements.  To ensure it meets California state exempt employee salary requirements after the minimum wage increase.   When state minimum wage increases, so must this salary threshold for exempt employees.
  2. Review Overtime/double-time and other pay calculations. Make sure they reflect all changes and amendments to the wage and hour laws (state and federal) effective January 1, 2020. Overtime/double-time, meal periods, weighted average and regular rates of pay for blended rates, etc.
  3. Adjust the minimum wage threshold for piece-rate, commission or other complex wage calculations.
    Do not forget about the employees paid in alternative methods, for example, piece-rate, commission, bonuses etc. All non exempt employees, no matter the method and complex wage calculations performed, must earn at least the federal, state or local ordinance minimum wage requirement for all hours worked including overtime (if applicable according to hours worked).

 

OnePoint automatically updates minimum wage rates

The OnePoint real-time system updates ensure that the pay rate tables are updated as minimum wages increase at the state and municipal level.  This makes it easier perform wage audits faster to ensure compliance with wage rates. Quick compensation rate reports provide current compensation rates for each of your employees. Run the base compensation history report and apply a filter to only display current rates to quickly verify pay rates.

 

 

Increases Scheduled for January 1, 2021 (or in 2021)
State Minimum Wage Change Eff. Jan 1, 2021 Planned Changes
Alaska Increase from $10.19 to 10.34 per hour Annual increases based on the % change in the CPI-U for Anchorage metropolitan area, Jan 1.
Arizona Increase from $12.00 to $12.15 per hour
(Not applicable to small businesses with less than $500,000 in annual gross revenue. Also, not applicable to state or federal employers.)		 Annual indexing begins Jan 1, 2021.
Arkansas

Increase from $10.00 to 11.00 per hour

 Jan 1, 2021
California

For employers with 26 or more employees:
Increase from $13.00 to $14.00 per hour.

For employers with 25 or fewer employees:
Increase from $12 to $13.00 per hour.

 > 26 EE’s
$15.00 eff. 1-1-2022
< 26 EE’s
$14.00 eff. 1-1-2022;
$15.00 eff. 1-1-2023
Colorado Increase from $12.00 to $12.22 per hour Annual indexing begins Jan 1, 2021.
Connecticut Increase from $12.00 to $13.00, effective August 1, 2021

Upcoming increases:$14.00, effective July 1, 2022
$15.00, effective June 1, 2023
Annual indexing begins Jan 1, 2024.
Delaware Increase from $9.25 to $10.25 per hour. $9.75, eff. 10-1-2020;
$10.25, eff. 10-1-2021;
Annual indexing begins January 1, 2021.
Florida Increase from $8.56 to $8.65 per hour The state Agency for Workforce Innovation will increase the rate each year on September 30 by the rate of inflation during the 12 months prior.
Illinois Increase from $10.00 to $11.00 per hour  
Maine Increase from $12.00 to $12.15 per hour Annual indexing begins Jan 1, 2021.
Maryland

Employers with 25 or more employees $11.00 to $11.75 per hour

Employers with less than 25 employees will pay a minimum wage of $11.60 per hour

On Jan 1, 2020 Maryland implemented different rate schedules for large and small employers. (Large being 15 or more workers and small defined as 14 or fewer.)

Read more about the change at Maryland DOL
Massachusetts Increase from $12.75to $13.50 per hour.
Note: The state minimum wage rate must be at least 10 cents higher than the federal minimum wage rate.

$14.25 eff. 1-1-2022;

$15.00 eff. 1-1-2023.

 
Michigan Increase from $9.65 to $9.87 per hour $10.10, effective January 1, 2022
$10.33, effective January 1, 2023
Minnesota

Large Emp. (>$500,000 in revenues): Increase from $10.00 to $10.08 per hour.

Small Emp.(<$500,000 in revenues): Increase from $8.15 to $8.21 per hour.

 Annual indexing eff. January 1. Increases based on the August-to-August percentage change in the price deflator for national personal consumption expenditures (PCE), with a maximum increase of 2.5 percent, beginning January 1, 2018.
Missouri Increase from $9.45 to $10.30 per hour

See Missouri Proposition B:

Upcoming increases:

$11.15 eff. 1-1-2022;
$12.00 eff. 1-1-2023;
Adjusted for inflation 1/1/2024 and every January 1 thereafter.
Montana Increase from $8.65 to $8.75
Note: Minimum wage of $4.00 applies to all businesses that have gross annual sales less than $110,000 and that are not covered by the Fair Labor Standards Act.		 Increases based on the August-to-August percentage change in the CPI-U, U.S. city average, rounded to the nearest 5 cents.
New Jersey Increase from $11.00 to $12.00 per hour

Annual increases based on the August-August CPI or at least $1, whichever is greater. (The rate will hit $15 for most employers in 2024.)

New Jersey rates by employer type
New Mexico Increase from $9.00 to $10.50 per hour

Upcoming increases:                  
$11.50, effective Jan 1, 2022
$12.00, effective Jan 1, 2023
New York Increase from $11.80 to $12.50 per hour

 Minimum wage for fast food industry workers in the state will be increased to $15 on July 1, 2021. 
Nevada Increase from $9.00 to $9.75, effective July 1, 2021

Upcoming increases:

$10.50, effective July 1, 2022
$11.25, effective July 1, 2023
$12.00, effective July 1, 2024
Ohio

2021 escalated rate of $8.80 per hour

 Annual indexing based on the August-to-August percentage change in the CPI-W U.S., city average, rounded to nearest 5 cents.
Oregon Increase from $12.00 to $12.75 per hour effective 7/1/2021.

Annual increases based on the March-to-March change in the CPI-U, U.S. city average, rounded to nearest 5 cents.

Upcoming increases:

$13.50, eff. 7/1/2022.
South Dakota Increase of $9.30 to $9.45 per hour Annual indexing increases based on the percentage change in the CPI, rounded to the nearest 5 cents.
Vermont Increase from $10.96 to $11.75 per hour Annual Indexing increases determined as the smaller of 5 percent of the current minimum, or the August-to-August percentage change in the CPI-U, U.S. city average.
Virginia Increase from $7.25 to $9.50 per hour effective May 1, 2021. The rate will increase each year until it reaches $12 in 2023
Washington Increase from $13.50 to $13.69 per hour Annual indexing effecting Jan 1, 2021. Annual increases based on the August-to-August percentage change in the CPI-W, U.S. city average, beginning January 1, 2021.

 

Minimum Wage Changes

The state minimum wage rates discussed in this blog do not include county and city minimum wage rates. Also, this blog only covers updates from December 31, 2020 through July 2021 for states only.

This intended for market awareness only, it is not to be used for legal advice or counsel. Please access any number of public resources available to monitor changes to the minimum wage rate at the county or city level.

 

Public Resources
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