More than 20 states and 30 local minimum wage rates are scheduled to increase on January 1, 2022. Below is a summary of these changes and guidelines to help you comply with your minimum wage requirements.
State minimum wage increases:
This map covers January 1, 2022 minimum wage increases for all applicable states. Some states increase their minimum wage rates on a different schedule. The information below applies to January 1, 2022 (and December 31, 2021) increases only.
Note: After this Tip of the Week was published, the Colorado increase ($12.56 per hour) became final.
Local minimum wage increases:
Several cities are also increasing their minimum wage effective January 1, 2022. Some local jurisdictions adjust their minimum wages annually for inflation but haven’t announced their 2022 rates yet. The following chart includes many of the announced local rate changes for 2022 as well as some other local jurisdictions that typically make annual adjustments but haven’t announced their 2022 rate yet.
|Jurisdiction||Minimum wage rate January 1, 2022|
|Daly City, CA||$15.53|
|El Cerrito, CA||$16.37|
|Half Moon Bay, CA||$15.56|
|Hayward, CA||$14.52 (25 or fewer employees)
$15.56 (26 or more employees)
|Los Altos, CA||$16.40|
|Menlo Park, CA||$15.75|
|Mountain View, CA||$17.10|
|Novato, CA||$15 (1-25 employees)
$15.53 (26-99 employees)
$15.77 (100 or more employees)
|Palo Alto, CA||$16.45 (updated)|
|East Palo Alto, CA||$15.60|
|Redwood City, CA||$16.20|
Note: Under city law, employers that contribute at least a certain amount towards an employee medical benefits plan may be able to take a limited credit toward the minimum wage. Remember, employers must also comply with the state minimum wage. If the state minimum wage is higher than the applicable city rate with the credit, employers must pay at least the state minimum wage.
|San Carlos, CA||$15.77|
|San Diego, CA||$15|
|San Jose, CA||$16.20|
|San Mateo, CA||$16.20|
|Santa Clara, CA||$16.40|
|Santa Rosa, CA||$15.85|
|Sonoma, CA||$15 (25 employees or less)
$16 (26 employees or more)
|South San Francisco, CA||$15.80 (updated)|
|West Hollywood, CA||$15.00 (49 or fewer employees)
$15.50 (50 or more employees)
|Portland and Rockland, ME||
$10.50 (if not covered by state minimum wage and employer provides healthcare and/or childcare benefits of at least $2,500 per employee per year)
|Las Cruces, NM||$11.50|
$15.75 (if employer has 1-500 employees and provides $1.52/hour in medical benefits/tips)
In some jurisdictions, the minimum cash wage required for tipped employees also increases with the minimum wage. For example, the minimum cash wage for tipped employees in Arizona will increase to $9.80 per hour on January 1, 2022. If the combination of direct cash wages and tips falls below Arizona’s minimum wage ($12.80 per hour), employers must make up the difference.
Note: Some jurisdictions, such as California, don't allow employers to apply a tip credit toward the minimum wage. In such cases, you must pay tipped employees the full minimum in direct cash wages.
Multiple minimum wage rates:
If an employee is subject to more than one minimum wage requirement (such as federal, state, and local), you should pay the rate most generous to the employee. For example, if your state minimum wage is $14 and the local minimum wage is $15, you must generally pay the employee at least $15 per hour, since it's higher than the state and federal minimum wage rates. Additionally, if your business is located in one state, but you have employees (such as remote workers) working in another jurisdiction, the minimum wage in the location where the employee performs work generally applies.
Note: Some requirements may only apply to businesses of a certain size, or employees who perform a certain number of work hours in that jurisdiction. Check your state and local law for details.
Employees earning more than the minimum wage:
When the minimum wage increases, some employers provide a raise to employees already earning equal to or more than the new rate. While there's no obligation to provide a raise in such cases, some employees may be expecting one. Consider the potential impact on labor costs, employee morale, internal equity (how employees are paid when compared with other employees within your company based on skills and experience), and your typical merit increase schedule.
New posters and notices:
Most jurisdictions require employers to post an up-to-date minimum wage notice in the workplace. State and federal posters are available for download in the State & Federal Resources section of HR411®. ADP clients with the Labor Law Poster Compliance Update Service receive updated posters automatically. Your state or city may have additional notice requirements. For example, Minnesota employers are required to furnish each employee with a written notice of any change in pay before the change takes effect. Check your jurisdiction's requirements to ensure compliance.
More 2022 increases coming:
Some jurisdictions schedule their changes at another point during the year. For example, several state and local jurisdictions will increase their minimum wages on July 1, 2022.
In some states, including California, Maine, New York, and Washington, the minimum salary required to be classified as exempt from overtime is tied to the minimum wage and therefore will also increase on January 1, 2022. For additional information, see our recent Tip of the Week.
Note: State and federal law require that certain duties tests also be satisfied to qualify for exemption from overtime.
Ensure that you understand the minimum wage rules that apply to your employees and, if applicable, make any necessary changes in RUN Powered by ADP® before January 1, 2022 (December 31, 2021 in New York). Additionally, be sure to post updated minimum wage notices in each work location.