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.
Arizona’s minimum wage will increase to $12.80 per hour in 2022, up from $12.15 per hour.
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“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.
