More than 20 states and nearly 40 local jurisdictions will increase their minimum wage rates on January 1, 2025. Below is a summary of these changes and guidelines to help you comply with your minimum wage requirements.
State minimum wage increases
The following table covers January 1, 2025 minimum wage increases for all applicable states. Some states adjust their minimum wages annually for inflation, but they haven't announced their 2025 rates yet. The table includes all of the announced state-rate changes for the year. It also includes states that typically make annual adjustments but haven't announced their 2025 rate yet (TBD). The information below applies to January 1, 2025 increases only.
|
State |
Hourly minimum wage rate effective 1/1/25 |
|
Alaska |
TBD |
|
Arizona |
$14.70 |
|
California |
$16.50 Note: The state minimum wage may increase further if a ballot initiative on November 5, 2024 is approved by voters. This would also impact California cities with minimum wages below the voter-approved state minimum wage. |
|
Colorado |
$14.81 (proposed) |
|
Connecticut |
$16.35 |
|
Delaware |
$15.00 |
|
Illinois |
$15.00 |
|
Maine |
$14.65 |
|
Michigan |
$10.56 |
|
Minnesota |
$11.13 (all employers) |
|
Missouri |
TBD Note: The state minimum wage may increase if a ballot initiative on November 5, 2024 is approved by voters. |
|
Montana |
$10.55 |
|
Nebraska |
$13.50 |
|
New Jersey |
$15.49 (employers with six or more employees) |
|
New York |
$16.50 per hour (New York City, Long Island and Westchester County) |
|
Ohio |
$10.70 (employers with annual gross receipts of more than $394,000 per year) |
|
Rhode Island |
$15.00 |
|
South Dakota |
$11.50 |
|
Vermont |
$14.01 |
|
Virginia |
$12.41 |
|
Washington |
$16.66 |
Local minimum wage increases
Numerous cities and counties are also increasing their minimum wage rates effective January 1, 2025. Some local jurisdictions adjust their minimum wages annually for inflation, but they haven't announced their 2025 rates yet. The following table includes many of the announced local rate changes for 2025 as well as some other local jurisdictions that typically make annual adjustments but haven't announced their 2025 rate yet. The information below applies to January 1, 2025 increases only.
|
Local jurisdiction |
Hourly minimum wage rate effective 1/1/25 |
|
Flagstaff, Arizona |
$17.85 |
|
Tucson, Arizona |
$15.00 |
|
Belmont, California |
$18.30 |
|
Burlingame, California |
$17.48 |
|
Cupertino, California |
$18.20 |
|
Daly City, California |
$17.07 |
|
East Palo Alto, California |
$17.45 |
|
El Cerrito, California |
$18.34 |
|
Foster City, California |
$17.40 |
|
Half Moon Bay, California |
$17.47 |
|
Hayward, California |
$17.36 (26 or more employees) |
|
$16.50 (25 or fewer employees) |
|
|
Long Beach, California |
TBD (other than hotel/concessionaire workers) |
|
Los Altos, California |
$18.20 |
|
Menlo Park, California |
$17.10 |
|
Mountain View, California |
$19.20 |
|
Novato, California |
$17.27 (100 or more employees) |
|
$17.00 (26 to 99 employees) |
|
|
$16.50 (25 or fewer employees) |
|
|
Oakland, California |
TBD TBD (Hotel workers without health benefits) |
|
Palo Alto, California |
$18.20 |
|
Petaluma, California |
$17.97 |
|
Redwood City, California |
$18.20 |
|
Richmond, California |
TBD (Employer pays less than $1.50 per hour toward medical benefits) |
|
TBD (Employer pays at least $1.50 per hour toward medical benefits) |
|
|
San Carlos, California |
$17.32 |
San Diego, California
|
$17.25
Note: If the state ballot measure is ultimately approved by voters, the city’s 2024 minimum wage will automatically increase to $17.00 per hour and the 2025 minimum wage will increase to $18.00 per hour for all San Diego employers.
|
|
San Jose, California |
$17.95 |
|
San Mateo, California |
$17.95 |
|
San Mateo County, California (unincorporated areas only) |
$17.46 |
|
Santa Clara, California |
$18.20 |
|
Santa Rosa, California |
TBD |
|
Sonoma, California |
TBD (26 or more employees) |
|
TBD (25 or fewer employees) |
|
|
South San Francisco, California |
$17.70 |
|
Sunnyvale, California |
$19.00 |
|
West Hollywood, California |
$19.65 |
|
Boulder County, Colorado (unincorporated areas only) |
$16.57 |
|
Denver, Colorado |
$18.81 |
|
Edgewater, Colorado |
$16.52 |
|
Portland, Maine |
$15.50 |
|
Rockland, Maine |
$15.38 |
|
Howard County, Maryland |
$16.00 (15 or more employees) |
|
St. Paul, Minnesota |
$15.97 (101 or more employees) |
|
Albuquerque, New Mexico |
$12.00 (state minimum wage) |
|
Las Cruces, New Mexico |
$12.65 |
|
King County, Washington (unincorporated areas only) |
$18.29 (16-499 employees) $18.29 (15 or fewer employees and annual gross revenue of $2 million or greater) |
|
$17.29 (15 or fewer employees and an annual gross revenue of less than $2 million) |
|
|
Renton, Washington |
$18.90 (15 to 500 employees worldwide) $18.90 (1 to 14 employees with over $2 million of annual gross revenue in Renton) |
|
Seattle, Washington |
$20.76 |
|
SeaTac, Washington |
$20.17 (Hospitality and transportation employees) $20.10 (15 to 500 employees) |
|
Tukwila, Washington |
$20.10 (fewer than 15 employees and over $2 million of annual gross revenue in Tukwila) $16.66 (fewer than 15 employees and earn $2 million or less in annual gross revenue in Tukwila) |
Other wage considerations
Tipped employees
In some jurisdictions, the minimum cash wage required for tipped employees also increases with the minimum wage. For example, in Illinois, tipped employees must be paid minimum wage, but an employer may take credit for the employee's tips in an amount not to exceed 40 percent of the wages. Thus, for an employer to claim the tip credit in 2025, the employee must receive direct cash wages and tips of at least $15.00 per hour (at least $9 of which must be in direct cash wages).
Note: Some jurisdictions, such as Alaska, California, Minnesota and Montana, 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. Check your state and local law for details.
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 downloading in the HR section of the RUN Powered by ADP® (RUN) platform. 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 2025 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, 2025. Some employers may even see two increases in 2025. For example, Michigan’s minimum wage will increase to $10.56 per hour on January 1, 2025 and then to $12.48 per hour on February 21, 2025.
Overtime exemptions
In some states, including Alaska, California, Colorado, Maine, New York and Washington, the minimum salary required to be classified as exempt from overtime is tied to the minimum wage or is otherwise adjusted annually with the minimum wage and therefore will also increase on January 1, 2025. We will cover changes to minimum salary requirements for 2025 in an upcoming Tip of the Week.
Note: State and federal law require that certain duties tests also be satisfied to qualify for exemption from overtime.
Conclusion
Ensure that you understand the minimum wage rules that apply to your employees and, if applicable, make any necessary changes in RUN before January 1, 2025. Additionally, be sure to post updated minimum wage notices in each work location.