At Lift HCM, we understand how challenging it can be to stay compliant with ever-changing wage laws while balancing financial goals. As a business leader, you may feel overwhelmed by the intricacies of minimum wage updates, concerned about how they impact your workforce, and unsure of the best way to prepare. This guide breaks down the key updates for 2025, explains their implications for businesses and workers, and offers actionable steps to ensure you’re ready for the changes ahead.
Table of Contents
Minimum wage laws exist to ensure workers receive a fair baseline hourly pay for their labor. Introduced during the Great Depression, these laws continue to evolve, addressing inflation, cost of living, and economic disparities across regions.
Key factors driving annual changes:
For 2025, numerous states have implemented scheduled increases or CPI-based adjustments to better align with economic demands. Local variations, such as those in Chicago or Cook County, can further complicate compliance.
More than 20 states have announced minimum wage increases for 2025. The federal minimum wage remains at $7.25 an hour, a rate last adjusted in July 2009; however, states have enacted their own minimum wages, either outright or linked to inflation.
The following states have raised their minimum wage as of January 1st, 2025:
The federal Fair Labor Standards Act (FLSA) sets minimum wage and overtime standards for most employers. If you're unsure about coverage, consult an employment lawyer. The federal minimum wage is $7.25 per hour. Tipped employees (receiving over $30/month in tips) can be paid a $2.13 base wage if that plus tips equals at least $7.25 (this is the "tip credit").
State and local laws set minimum wages, sometimes with different tip credit rules. Employees get the highest applicable wage. The chart shows state minimum and tipped wages as of January 1, 2025, including increases. It includes state rates at or above the federal minimum and excludes public contracts. Blank rows mean the law applies to all employers. If no state law exists, the FLSA applies. The chart doesn't cover overtime, premium/hazard pay, or detailed tip credit rules. Check local requirements.
*Employers in states without minimum wage laws, where the minimum wage is below the federal rate of $7.25 per hour, are required to adhere to the federal minimum wage for all employees covered by the Fair Labor Standards Act.
| State |
Minimum Wage |
Minimum Tipped Wage | Maximum Tip Credit | Notes |
| Alabama | $7.25* | $2.13* | $5.12* | No minimum wage; federal law applies |
| Alaska | $11.91 | $11.73 | Tip credit prohibited | Increasing to $13/hour on 7/1/25 |
| Arizona | $14.70 | $11.70 | $3.00 | |
| Arkansas | $11.00 | $2.63 | $8.37 | Tipped employees must earn at least $20/month in tips |
| California | $16.50 | $16.50 | Tip credit prohibited | |
| Colorado | $14.81 | $11.79 | $3.02 | Tipped employees must earn at least $30/month in tips |
|
Connecticut |
$16.35 | $6.38 hotels/restaurants; $8.23 bartenders | 36.8% for hotels/ restaurants; 18.5% bartenders |
|
| Delaware | $15.00 | $2.23 | $11.02 | Tipped employees must earn at least $30/month in tips |
| District of Columbia | $17.50 | $12.00 | $11.50 | Adjusted annually on July 1 |
| Florida | $13.00 | $10.98 | $3.02 | Increasing to $14/hour 9/30/25; $15/hour 9/30/26 |
| Georgia | $5.15* | $2.13* | $5.12* | Federal standards apply; special training and student wage rates exist |
| Hawaii | $14.00 |
$12.75 |
$1.25 |
Increasing to $16/hour 1/1/26; $18/hour 1/1/28 |
| Idaho | $7.25 | $3.35 | $3.90 | Tipped employees must earn at least $30/month in tips |
| Illinois | $15.00 | $9.00 | 40% | Tipped employees must earn at least $20/month in tips |
| Indiana | $7.25 | $2.13 | $5.12 | Tipped employees must regularly earn at least $30/month in tips |
| Iowa | $7.25 | $4.35 | $2.90 | Tipped employees must earn at least $30/month in tips |
| Kansas | $7.25 | $2.13 | $5.12 | Tipped employees must earn at least $20/month in tips |
| Kentucky | $7.25 |
$2.13* |
$5.12* |
Tipped employees must regularly earn at least $30/month |
| Louisiana | $7.25* |
$2.13* |
$5.12* |
No minimum wage; federal law applies |
| Maine | $14.65 | $7.33 | 50% | Tipped employees must regularly earn at least $30/month in tips |
| Maryland | $15.00 |
$3.63 |
$11.37 |
Tipped employees must regularly earn at least $30/month |
| Massachusetts | $15.00 |
$6.75 |
$8.25 |
Tipped employees must regularly earn at least $20/month |
| Michigan | $10.56; $8.78 for minors 16-17 years of age |
$4.01 | $6.40 | Increasing to $12.48/hour 2/21/25; Tipped Wage increasing to $5.99 2/21/25 |
| Minnesota | $11.13; $9.08 for 90-day trainees under 20 years of age and youth employees under 18 years of age |
$11.13 |
Tip credit prohibited |
|
| Mississippi | $7.25* |
$2.13* |
$5.12* |
No minimum wage; federal law applies |
| Missouri | $13.75 | $6.88 | 50% | |
| Montana | $10.55 | $10.55 | Tip credit prohibited | |
| Nebraska | $13.50 | $2.13 | $9.87 | Increasing to $15.00 on 1/1/25; then adjusted annually beginning 1/1/27 |
| Nevada | $12.00 |
$12.00 |
Tip credit prohibited |
|
| New Hampshire | $7.25 |
$3.27 |
$3.98 |
Tipped employees must regularly earn at least $30/month |
| New Jersey (6 or more EEs) | $15.49 |
$5.62 |
$9.87 |
|
| New Jersey (5 or less EEs and Seasonal ER) | $14.53 |
$5.62 |
$8.47 |
|
| New Mexico | $12.00 |
$7.20 |
$9.00 |
Tipped employees must regularly earn at least $30/month |
| New York | $15.50 |
$10.35 food service workers; $12.90 service employees |
$5.15 food service |
See industry wage orders for additional requirements. |
| North Carolina | $7.25 |
$2.13 |
$5.12 |
Tipped employees must regularly earn at least $20/month |
| North Dakota | $7.25 |
$4.86 |
33% |
Tipped employees must regularly earn at least $30/month |
| Ohio | $10.70 (gross receipts of $394,000 or more); $7.25 (gross receipts under $394,000) |
$5.35 |
$5.25 (gross receipts of $385,000 or more); |
Tipped employees must regularly earn at least $30/month |
| Oklahoma | $7.25 |
$3.63 |
50% |
|
| Oregon Urban/Standard Counties |
$14.70 |
$14.70 |
Tip credit prohibited |
|
| Oregon Portland Metro Area |
$15.95 |
$15.95 |
|
|
| Pennsylvania | $7.25 |
$2.83 |
$4.42 |
Tipped employees must regularly earn at least $30/month |
| Rhode Island | $15.00 |
$3.89 |
$10.11 |
|
| South Carolina | $7.25* |
$2.13* |
$5.12* |
No minimum wage; federal law applies |
| South Dakota | $11.50 | $5.75 | 50% | Tipped employees must regularly earn at least $35/month in tips; cash wage must be at least half of minimum wage |
| Tennessee | $7.25* | $2.13* | $5.12* | No minimum wage; federal law applies |
| Texas | $7.25 | $2.13 | $5.12 | Tipped employees must regularly receive at least $20/month in tips |
| Utah | $7.25 | $2.13 | $5.12 | Tipped employees must regularly receive at least $30/month in tips |
| Vermont | $14.01 | $7.01 | 50% | Tipped employees must regularly receive at least $120/month in tips |
| Virginia | $12.41 | $2.13 | $5.12* | No maximum tip credit; federal law applies; increasing to $15.00 on 1/1/26 |
| Washington | $16.66 for workers 16 years of age and older; $13.84 for workers 14-15 years of age |
$16.28 for workers 16 years of age and older; $13.84 for workers 14-15 years of age |
Tip credit prohibited | |
| West Virginia | $8.75 | $2.62 | $6.13 | |
| Wisconsin | $7.25 | $2.33 | $4.92 | |
| Wyoming | $5.15* | $2.13 | $3.03 | Tipped employees must regularly earn at least $30/month in tips |
*Georgia: 7.25 (if covered under FLSA); $5.15 (if not covered under FLSA); Special “training rate” of $4.25 applies to new employees under the age of 20 for their first 90 days. Full time students in high school or college who work 20 hours or less per week can be paid $6.16, or $85 of
the standard minimum wage if their job fits a work-study program or other specified situations.
*Hawaii: Increasing to $16.00 1/1/26; $18.00 1/1/28. Tipped employees must regularly earn at least $20 per month in tips; combined wage must be at least $7.00 more than the applicable
minimum wage.
*Oregon Urban/Standard Counties: An employer’s location affects minimum wage rate.
Areas not in Portland’s urban growth boundary or one of the listed nonurban counties (urban counties) (Benton, Clackamas, Clatsop, Columbia, Deschutes, Hood River, Jackson, Josephine, Lane, Lincoln, Linn, Marion, Multnomah, Polk, Tillamook, Wasco, Washington, Yamhill counties)
Adjusted annually July 1.
*Oregon Portland Metro Area: Within Portland’s urban growth boundary (metro area) (including portions of Clackamas, Multnomah, and Washington counties); Adjusted annually July 1.
Adapting to wage changes is about more than just compliance; it’s an opportunity to refine your operations and strengthen employee trust. Here are practical steps to help your business stay ahead:
Conduct Regular Wage Audits: Ensure compliance with both state and local wage laws.
Communicate With Employees: Transparently share wage updates and explain how they impact paychecks.
Leverage Technology: Use payroll software to automatically update rates and calculate overtime.
Plan for Budget Adjustments: Account for higher labor costs in financial forecasts.
Stay Proactive: Monitor legislative updates throughout the year.
Let’s face it—minimum wage changes can feel like a never-ending maze, but you don’t have to navigate it alone. With this guide, you’ve gained the clarity and confidence to tackle 2025’s updates head-on.
Think back to where you started: confusion, uncertainty, maybe even a little frustration about what these changes mean for your business. Now, you’ve got the tools to adapt. You understand the key updates, their implications, and actionable strategies to stay compliant and ahead of the curve.
The road forward doesn’t have to be overwhelming. At Lift HCM, we specialize in making compliance simple and seamless. From automated payroll solutions to expert guidance, we’re here to be your partner in success. Let’s transform wage compliance from a source of stress into an opportunity to elevate your business!