Minimum Wage Increases in 2022: Four Updates Employers Need to Know

Employers across the US must stay updated on minimum wage increases in 2022. To maintain compliance and avoid back payments, penalties, and potential lawsuits, employers must meet all applicable state minimum wage or local minimum wage requirements as soon as the wage rate becomes effective. In many cases, a higher minimum wage will be required in the new year. MP’s HR and payroll experts share four essential considerations employers must know about minimum wage rates and minimum wage law in 2022.

Four Critical Updates on 2022 Minimum Wage Increases

1. Minimum wage increases may be occurring in your state or city.

This year, employers will be required to meet a higher state minimum wage in a record-setting 56 counties, states, and cities. In 2022, there will be a higher state minim wage in 26 states. In 22 of those states, the new minimum wage applies as of January 1, 2022. Employers should check the chart at the end of the article to stay updated on whether the minimum wage increased in their state or city for 2022.

2. Remote employers may be responsible for multiple 2022 minimum wage increases.

As with any other compliance requirements, employers must remember they’re responsible for employment law based on the locations “where work is performed” for their organization. When organizations have remote employees living in different states or cities than the headquarters, they must pay these employees based on minimum wage requirements applicable to the state they live, and thus work. As employers check for minimum wage increases, they must consider the locations where their remote workers (who are paid minimum wage) live.

3. The 2022 minimum wage increases are part of a broader trend that will continue.

Employers that aren’t in states or cities with a rising minimum wage may want to consider:

• Raising their wages in 2022 to be competitive
• Preparing to raise their wages in the near future

Wages are rising all over the US in precedented amounts. Puerto Rico will raise its minimum wage for the first time since 2009. In West Hollywood, CA, employers will be required to pay hotel workers a minimum wage of $17.64.

The timing of this trend isn’t a coincidence. This change is part of an extended fight that started around ten years ago to raise the minimum wage to $15 per hour. Many states that aren’t increasing minimum wages to $15.00 per hour this year are implementing a staggered increase that will eventually lead to this goal. These states include California, (parts of) New York, Connecticut, Massachusetts, New Jersey, Delaware, Illinois, Maryland, Rhode Island, Florida, and Pennsylvania.

Advocates of this change believe this amount will ensure a living wage for all American citizens. This reformation will improve the quality of life for those directly impacted, but these advocates argue it will also improve the economy as a whole. When more Americans make more money, (at least some of) that money will be spent. This new spending injects the economy with a new boost, benefitting everyone.

It’s also not a coincidence that all these minimum wage increases will be implemented in 2022. The new presidential administration and Department of Labor (DOL) are focused on creating a living wage for all US citizens. Additionally, the pandemic and its ensuing labor shortage are accelerating the urgency for this agenda. Inflation is at record levels, and the Consumer Price Index has reached its highest level in over a decade.

4. Minimum wages are rising from a state, federal, and private corporation level.

Employers should note that they may want to raise their wages to be competitive with the vast array of organizations raising their wages in 2022. All federal contractors will be paid at least a $15 minimum wage, per an Executive Order. The various deadlines for the federal minimum wage increase will start at the end of January and continue until the end of March. By then, all agencies must include this minimum wage in new, existing, and renewed contracts. In addition to the minimum wage increases in federal wages, many corporations are also increasing minimum wages, regardless of state requirements. Companies such as Costco, Chipotle, Aetna, Wells Fargo, Walmart, and more, are increasing their wages. These employers note they’re benefitting in terms of employee retention and attracting talent. However, they’re also seeing:

• More engaged workers
• Higher-quality candidates
• Improved customer service

States	Coverage	2021	2022
Alabama	All Employees	$7.25	$7.25
Alaska	All Employees	$10.34	$10.34
Arizona	All Employees	$12.15	$12.80
Arkansas	All Employees	$11.00	$11.00
California	Employers with 25 or fewer employees	$13.00	$14.00
California	Employers with 26 or more employees	$14.00	$15.00
Colorado	All Employees	$12.32	$12.56
Connecticut	All Employees	$13.00	$14.00 (effective 7/01/2022)
Delaware	All Employees	$9.25	$10.50
District of Colombia	All Employees	$15.20	$15.20
Florida	Employers with 6 or more employees	$10.00	$11.00 (effective 9/30/2022)
Georgia	All Employees	$7.25	$7.25
Hawaii	All Employees	$10.10	$10.10
Idaho	All Employees	$7.25	$7.25
Illinois	All Employees	$11.00	$12.00
Indiana	All Employees	$7.25	$7.25
Iowa	All Employees	$7.25	$7.25
Kansas	All Employees	$7.25	$7.25
Kentucky	All Employees	$7.25	$7.25
Louisiana	All Employees	$7.25	$7.25
Maine	All Employees	$12.15	$12.75
Maryland	Employers with 14 or fewer employees	$11.60	$12.20
Maryland	Employers with 15 or more employees	$11.75	$12.50
Massachusetts	All Employees	$13.50	$14.25
Michigan	Employers with 2 or more employees	$9.65	$9.87
Minnesota	Less than $500,000 Annual Gross Income	$8.21	$8.42
Minnesota	$500,000 or more Annual Gross Revenues	$10.08	$10.33
Mississippi	All Employees	$7.25	$7.25
Missouri	All Employees	$10.30	$11.15
Montana	Business not covered by the FLSA with gross annual sales of $110,000 or less	$4.00	$9.20
Montana	All Employees	$8.75	$9.20
Nebraska	All Employees	$9.00	$9.00
Nevada	With benefits	$8.75	$9.50 (effective 7/01/2022)
Nevada	Without benefits	$9.75	$10.50 (effective 7/01/2022)
New Hampshire	All Employees	$7.25	$7.25
New Jersey	Seasonal & small employers (fewer than 6 employees)	$11.10	$11.90
New Jersey	All Employees	$12.00	$13.00
New Mexico	All Employees	$10.50	$11.50
New York	Greater New York State	$12.50	$13.20 (effective 12/31/2021)
North Carolina	All Employees	$7.25	$7.25
North Dakota	All Employees	$7.25	$7.25
Ohio	Employers that gross $323,000 or more	$8.80	$9.30
Ohio	Employers that gross less than $323,000	$7.25	$9.30
Oklahoma	All Employees	$7.25	$7.25
Oregon	Standard	$12.75	$13.50 (effective 7/01/2022)
Oregon	Portland Metro	$14.00	$14.75 (effective 7/01/2022)
Oregon	Non Urban Counties	$12.00	$12.50 (effective 7/01/2022)
Pennsylvania	All Employees	$7.25	$7.25
Rhode Island	All Employees	$11.50	$12.25
South Carolina	All Employees	$7.25	$7.25
South Dakota	All Employees	$9.45	$9.95
Tennessee	All Employees	$7.25	$7.25
Texas	All Employees	$7.25	$7.25
Utah	All Employees	$7.25	$7.25
Vermont	All Employees	$11.75	$12.55
Virginia	All Employees	$9.50	$11.00
Washington	All Employees	$13.69	$14.49
West Virginia	Employers with 6 or more nonexempt employees	$7.25	$7.25
West Virginia	Employers with 5 or fewer employees	$8.75	$8.75
Wisconsin	All Employees	$8.75	$7.75
Wyoming	All Employees	$7.25	$7.25