While 2020 has been a year full of unexpected changes, one thing that has remained constant is the federal minimum wage. The last time it changed was in 2009 when the wage increased from $6.55 to $7.25, and it is expected to remain the same for the immediate future. No matter the federal minimum wage, each state has the ability to select its own minimum wage to implement for its workers. If a state’s minimum wage is higher than the federal wage, employers must pay the higher rate to their employees. In 2021, some states are adopting increased minimum wage rates, and employers must be prepared to account for the new rates.

DM Payroll Solutions has compiled a list of the states with minimum wage raises, as well as more information on the states with unique circumstances:

• Alaska – Increasing from $10.19 to $10.34
• Arizona – Increasing from $12.00 to $12.15
• Arkansas – Increasing from $10.00 to $11.00
• California* – Increasing from $13.00 to $14.00
  • This increased rate will only be applied to employers with 26 or more employees. If a business employs 25 or fewer employees, the minimum wage is $13.00.
• Colorado – Increasing from $12.00 to $12.32
• Florida – Increasing from $8.56 to $8.65
• Illinois – Increasing from $10.00 to $11.00
• Maine – Increasing from $12.00 to $12.15
• Maryland* – Increasing from $11.00 to $11.75
  • This increased rate will only be applied to employers with 15 or more employees. If a business employs 14 or fewer employees, the minimum wage is $11.60.
• Massachusetts – Increasing from $12.75 to $13.50
• Michigan – Increasing from $9.65 to $9.87
• Minnesota* – Increasing from $10.00 to $10.08
  • This increased rate will only be applied to large employers. If a business is considered a small employer, the minimum wage is $8.21.
    • $8.21 an hour is also to be used for 90-day learning pay for employees under 20 years old as well as youth salary for employees under 18 years old.
• Missouri – Increasing from $9.45 to $10.30
• Montana – Increasing from $8.65 to $8.75
• Nevada – Increasing from $10.00 to $10.75
• New Jersey – Increasing from $11.00 to $12.00
• New Mexico – Increasing from $9.00 to $10.50
• New York* – Increasing from $11.80 to $12.50
  • This increased rate applies to New York state; the minimum wage is $15.00 in New York City and $14.00 for Long Island and Westchester.
• Ohio – Increasing from $8.70 to $8.80
• South Dakota – Increasing from $9.30 to $9.45
• Vermont – Increasing from $10.96 to $11.75
• Washington – Increasing from $13.50 to $13.69

Prepare Your Payroll Software

If the minimum wage has increased in your state, be sure to make the adjustment in your payroll solution or else you could be subject to compliance penalties. Fortunately, DM Payroll Solutions processes payroll in all 50 states and takes on the responsibility of staying on top of the latest tax laws on your behalf. If you need help managing your workforce’s pay increases, contact us today.