As changes occur within our economy and the prices of goods and services increase, federal and local minimum wages are updated to compensate for these adjustments. The minimum wage is defined as the lowest amount per hour that an employer may pay their worker according to the law.Â
This minimum wage rule is mandated by federal law, according to the Fair Labor Standards Act. So how are minimum wages adjusted, and how do minimum wage amounts affect the job market?
In this resource, we will be discussing the current federal minimum wage increase in 2022, the US minimum wages by state, the latest state minimum wage increases, and more. Additionally, we will look at minimum wage rates with regards to staying competitive as employers determine competitive wages for their hospitality staffing positions.
What is the Current 2022 Federal Minimum Wage?
In the United States of America, the current federal minimum wage is $7.25 per hour, which applies to all workers covered under the federal Fair Labor Standards Act (FLSA) as of November 23, 2021. The Fair Labor Standards Act establishes the federal minimum wage, as well as standards for overtime pay, youth employment, and recordkeeping.
The federal minimum wage change effective in November of 2021 is not to be confused with changes to the state minimum wage laws. State minimum wage laws apply to jobs in a particular state. These laws indicate that employers must provide pay amounts to their workers that comply with both federal minimum wage and state minimum wage laws.
Over the years, the minimum wage amount has increased due to various factors such as the increase in the cost of living and the value of US currency changes. View the list below for the most recent increases for the federal minimum wage amount and the dates upon which these adjustments took place.
- September 1, 1997 – $5.15
- July 24, 2007 – $5.85
- July 24, 2008 – $6.55
- July 24, 2009 – $7.25
How Many States Increased the Minimum Wage in 2022?
So how many states have seen a minimum wage increase in 2022? In 2022, 25 US states increased their minimum wage amounts and Washington DC. Twenty-one of these state minimum wage increases have already taken effect, with 20 effective on January 1, 2022, and one effective on December 31, 2021.Â
The remaining state minimum wage changes are set to take effect on July 1, 2022, and one is to take effect on September 30, 2022.
About States Increasing the Minimum Wage in 2022
So how does the federal pay raise of 2022 apply for states that have differing state minimum wage amounts? According to the law, states may set their own local minimum wage amounts, so long as these amounts are at least as high as the federal minimum wage.Â
Therefore, employers in states with differing local minimum wages will have to comply with the minimum wage amount set in place by their state.
At the beginning of 2022, several states enacted local minimum wage pay raises. These state minimum wage raises ranged from a few cents to dollars per hour. Some of the most significant state minimum wage increases occurred in Virginia, which experienced an increase of $1.50, and in Delaware, which saw a minimum wage increase of $1.25. Alternatively, Connecticut, Florida, New Mexico, California, Illinois, and New Jersey each increased their local minimum wage amounts by $1.00.Â
The reasons that these states may have increased their minimum wages could have been due to several factors, including previously approved legislation, ballot initiatives, or other state-mandated wage increases. However, these local minimum wage increases also could have been attributed to automatic cost-of-living adjustments, which are adjusted based on inflation.Â
Some states that have raised their minimum wage rates based on cost-of-living adjustments and inflation would include Washington, which increased their minimum wage amount by $0.80, Arizona, which increased their minimum wage amount by $0.65, and South Dakota’s increased their minimum wage amount by $0.50.Â
Not all states apply their local minimum wage amounts the same way. For example, some states like Minnesota may also apply differing minimum wages to employers based on whether they would be considered large employers or small employers.
Depending on your industry and job type, you may be subject to different minimum wage rules. For example, for tipped employees, the FLSA rates are applied differently. Employers must pay any tipped employee who earns at least $30 in tips per month at least a minimum wage of $2.13 per hour. This is because the amount that these workers would make in tips could be applied to their wages. States can also determine their own local minimum wage rates for tipped workers, so long as the amounts are at least as high as the federal minimum wages for tipped workers.
2022 US Minimum Wage By State
The following list includes states and their wage increase amounts for this year. You can view this data to see how the wages have increased in 2022. The majority of these state increases occurred on January 1, 2022, except for New York state’s minimum wage increase, which occurred on December 31, 2021.
- Arizona: The minimum wage in Arizona increased from $12.15 to $12.80 on January 1, 2022.
- California: The minimum wage in California increased from $14.00 to $15.00 on January 1, 2022.
- Colorado: The minimum wage in Colorado increased from $12.32 to $12.56 on January 1, 2022.
- Delaware: The minimum wage in Delaware increased from $9.25 to $10.50 on January 1, 2022.
- Illinois: The minimum wage in Illinois increased from $11.00 to $12.00 on January 1, 2022.
- Maine: The minimum wage in Maine increased from $12.15 to $12.75 on January 1, 2022.
- Maryland: The minimum wage in Maryland increased from $11.75 to $12.50 on January 1, 2022.
- Massachusetts: The minimum wage in Massachusetts increased from $11.75 to $12.50 on January 1, 2022.
- Michigan: The minimum wage in Michigan increased from $9.65 to $9.87 on January 1, 2022.
- Minnesota: The minimum wage in Minnesota increased from $10.08 to $10.33 for large employers on January 1, 2022. Minnesota’s minimum wage increased from $8.21 to $8.42 per hour for small employers on January 1, 2022 as well.
- Missouri: The minimum wage in Missouri increased from $10.30 to $11.15 on January 1, 2022.
- Montana: The minimum wage in Montana increased from $10.30 to $11.15 on January 1, 2022.
- New Jersey: The minimum wage in New Jersey increased from $12.00 to $13.00 on January 1, 2022.
- New Mexico: The minimum wage in New Mexico increased from $10.50 to $11.50 on January 1, 2022.
- New York: The minimum wage in New York increased from $12.50 to $13.20 on December 31, 2021.
- Ohio: The minimum wage in Ohio increased from $8.80 to $9.30 on January 1, 2022.
- Rhode Island: The minimum wage in Rhode Island increased from $11.50 to $12.25 on January 1, 2022.
- South Dakota: The minimum wage in South Dakota increased from $9.45 to $9.95 on January 1, 2022.
- Vermont: The minimum wage in Vermont increased from $11.75 to $12.55 on January 1, 2022.
- Virginia: The minimum wage in Virginia increased from $9.50 to $11.00 on January 1, 2022.
Washington: The minimum wage in Washington increased from $13.69 to $14.49 on January 1, 2022.
Why Meeting Minimum Wage is Not Enough to Stay Competitive?
If the federal and state minimum wage rates are constantly increasing, one can assume that most workers would be excited about the rise in their pay. So why, according to recent job reports, have employment rates been lower in recent years? Â
As it turns out, today’s employers are experiencing increased difficulty in hiring for their open positions, even with the local minimum wage increasing in half of the US states. This can be attributed to the fact that the job market has become more competitive, and job seekers have become more selective on what roles they take on. Moreover, especially since the onset of the COVID-19 pandemic, workers are becoming less inclined to take just any job that has an opening available.
Because of this increase in job market competition, businesses that simply offer the minimum wage amount for their open positions are often less favored by job applicants. This is because providing the minimum wage amount has become no longer enough of an incentive for workers to take these jobs.Â
Therefore, for businesses to stay competitive with qualified workers in this selective job market, they need to provide higher wages that will generate interest in their open roles. So how can employers determine the right competitive wages to offer for their positions?
Businesses can set competitive wages as a method to gain interest in the job market and attract new talent to their workforces. Many employers turn to staffing solutions like Adia to determine the optimal competitive salary for hospitality positions.Â
Adia is an online staffing platform that helps connect qualified workers seeking employment with open positions. Employers can benefit from Aida’s services, as the platform helps employers develop job descriptions that attract workers with competitive rates to find qualified talent for their business. In addition, employers who use Adia are able to see what the minimum job wage amount is that employees who use Adia are willing to apply for and take on.Â
By having this information and applying it to your job descriptions, you are more likely to stay competitive and find workers willing to take on the roles you are offering in this current job market.Â
Stay Up-to-Date with Current Industry Standards on the Adia Blog
While there can be many reasons for federal and local governments increasing minimum wages, one thing’s for certain. That is that workers are more likely to be attracted to open job opportunities that provide higher pay rates. In addition, by implementing competitive wages for their open positions, employers can be more able to find new staff members that they can welcome to their work teams.Â
The Adia blog provides resources for workers and employers who seek information on hospitality staffing trends. Within the blog, you can find more helpful guidance on industry standards and everything to do with your onboarding questions and needs.
If you are interested in taking advantage of helpful staffing resources, visit the Adia Blog. Additionally, Adia provides services for both employers looking to fill open roles, as well as workers looking for hiring staff member positions in their industry. If you would like to learn more about what our online staffing platform can do for you, visit us online today for more information.
