Minimum wage: Keeping benefits competitive

Benefits pros need to keep an eye on the federal minimum wage in your area to maintain a competitive compensation plan. Thanks to the pandemic, the focus on federal minimum wage has increased.

As we’ve said in previous posts, employees who are financially stressed aren’t as focused or productive as those who aren’t financially stressed. Providing good wages helps relieve a lot of that stress. And while minimum wage is mandatory, benefits and compensation aren’t.

Sure, payroll takes care of staying on top of the federal minimum wage, but it’s your job to make sure that employees are compensated properly and competitively. So being knowledgeable about it is important, especially with everything that’s been going on lately.

Staying competitive

Jan. 1, 2022 saw the largest number of U.S states increase their minimum wage in U.S. history. Higher minimum wage laws affected 21 states and 35 cities on this date. (See end of story for specifics.)

Economic pressure, as well as local policies, have propelled wages well above minimum wage, causing all employers to raise wages whenever economically possible.

Around half the increases on Jan. 1 were new legislation or ballot measures phasing in wage hikes, the other half were regularly-scheduled inflation adjustments.

Some cities were more aggressive in their wage hikes to stay competitive during the Great Resignation. In turn that’s caused other companies to raise their wages, too – whether they have minimum wage employees or not.

Many small businesses say they can’t afford to pay their employees a higher minimum wage. But for the small companies that are doing it, they said they make up for the higher wage with a lot less employee turnover. Having an experienced workforce makes for smoother and more efficient work processes. Plus, they don’t spend nearly as much as before on recruiting or training.

State-by-state minimum wage offering

Here’s a list of each state and its minimum wage offering:

• Alabama None*
• Alaska             $10.34             Jan. 1, 2022
• Arizona           $12.80            Jan. 1, 2022
• Arkansas         $11.00            Jan. 1, 2021
• California        $15.00            Jan. 1, 2022
• Colorado         $12.56             Jan. 1, 2022
• Connecticut     $13.00            Aug. 1, 2021, increasing July 1, 2022 to $14 and June 1, 2023 to $15
• Delaware         $10.50            Jan. 1, 2022, increasing Jan. 1, 2023 to $11.75, Jan. 1, 2024 to $13.25 and Jan. 1, 2025 to $15.00
• Florida             $10.00            Sept. 30, 2021, increasing to $11.00 Sept. 30, 2022, to $12.00 Sept. 30, 2023, to $13.00 Sept. 30, 2024, to $14.00 Sept. 30, 2025, to $15 Sept. 30, 2026
• Georgia             $5.15*
• Hawaii             $10.10             Jan. 1, 2018
• Idaho               $7.25               Most recent major change by legislation was 2007
• Illinois             $12.00             Jan. 1, 2022, increasing to $13.00 Jan. 1, 2023, to $14.00 Jan. 1, 2024, to$15.00 Jan. 1, 2025
• Indiana           $7.25              
• Iowa                $7.25               Jan. 1, 2008
• Kansas             $7.25               July 1, 2009
• Kentucky        $7.25               July 1, 2009
• Louisiana        None*
• Maine              $12.75             Jan. 1, 2022
• Maryland        $12.50             Jan. 1, 2022, increasing to $13.25 Jan. 1, 2023, to $14.00 Jan. 1, 2024 to $15.00 Jan. 1, 2025
• Massachusetts $14.25           Jan. 1, 2022, increasing to $15.00 Jan. 1, 2023
• Michigan         $9.87              Jan. 1, 2022, increasing to $10.10 Jan. 1, 2023, to $10.33 Jan. 1, 2024, to $10.56 Jan. 1, 2025, to $10.80 Jan. 1, 2026, to 11.04 Jan. 1, 2027, to $11.29 Jan. 1, 2028, to $11.54 Jan. 1, 2029, to $11.79 Jan. 1, 2030, to $12.05 Jan. 1, 2031
• Minnesota       $10.33             Jan. 1, 2022
• Mississippi       None*
• Missouri          $11.15             Jan. 1, 2022, increasing to $12.00 Jan. 1, 2023
• Montana          $9.20               Jan. 1, 2022
• Nebraska         $9.00               Jan. 1, 2016
• Nevada            $9.75               July 1, 2021, increasing to $10.50 July 1, 2022, to $11.25 July 1, 2023, to $12.00 July 1, 2024
• New Hampshire $7.25            Most recent major change by legislation was 2011
• New Jersey      $13.00             Jan. 1, 2022, increasing to $14.00 Jan. 1, 2023, to $15.00 Jan. 1, 2024
• New Mexico    $11.50             Jan. 1, 2022, increasing to $12.00 Jan. 1, 2023
• New York       $13.20             Dec. 31, 2021
• North Carolina $7.25
• North Dakota $7.25               June 24, 2009
• Ohio                $9.30               Jan. 1, 2022
• Oklahoma        $7.25               June 24, 2009
• Oregon             $12.75             July 1, 2021, increasing to $13.50 July 1, 2022
• Pennsylvania $7.25    
• Rhode Island $12.25               Jan. 1, 2022, increasing to $13.00 Jan. 1, 2023, to $14.00 Jan. 1, 2024, to $15.00 Jan. 1, 2025
• South Carolina None*
• South Dakota $9.95                Jan. 1, 2022
• Tennessee        None*
• Texas               $7.25
• Utah                $7.25
• Vermont          $12.55             Jan. 1, 2022
• Virginia           $11.00             Jan. 1, 2022, increasing to $13.25 Jan. 1, 2023, to $13.50 Jan. 1 2025, to $15.00 Jan. 1, 2026
• Washington     $15.20            July 1, 2021
• West Virginia $8.75 Dec. 31, 2015
• Wisconsin $7.25 June 1, 2009
• Wyoming $5.15* Jan. 1, 2002

*Federal minimum wage of $7.25 applies.