A record number of states are raising their minimum wages in the new year, with more proposals to push for even higher rates. Here’s a rundown of what minimum wage events and proposals to expect in the New Year.
In 2023, nearly 90 states and localities are scheduled to raise their minimum wage rates. Inflation has been a major headline throughout the past year, and has been a major factor in rapidly rising rates in the coming year.
In January, 23 states, 41 cities and counties will raise their minimum wage rates, including the highest state minimum wage in the nation in Washington state rising to $15.74 per hour, and California’s dark-horse inflation-adjusted minimum wage, reaching $15.50 on January 1.
In February, we expect a decision in the Michigan Court of Appeals case regarding the existing minimum wage and tip credit law. Attorneys have requested a decision by February 1, 2023, to determine whether Michigan will revert to a 2018 ballot measure schedule to raise the minimum wage as high as $13 per hour and phase out the state tip credit. If the judges reverse the Court of Claims initial decision, Michigan will continue its existing minimum wage increase schedule to reach $12.05 per hour by 2031 and maintain the tip credit. If the judges sustain the lower court ruling, the minimum wage will rise after February 19 according to the 2018 ballot measure language and potentially adjusted for inflation.
In March, both the city and county of Santa Fe will raise their minimum wage rates, estimated to be roughly $14 per hour, and over $4 per hour for tipped employees, based on inflation.
In June, Connecticut’s minimum wage will rise to $15 per hour, with the tipped wage frozen at $6.38 per hour.
In July, there will be the second largest wave of wage hikes for the year. Three states and 19 cities have scheduled wage raises this month, including a newly-approved ballot measure to raise Tukwila, WA’s minimum wage to $19.06, and an estimated $18.86 per hour in West Hollywood, CA.
In September, Florida’s minimum wage will rise to $12 per hour, on its way to $15 per hour by 2026.
Among these scheduled changes, new state legislative sessions may bring new proposals to hike minimum wages even higher. For example, state Sen. Jessica Ramos in New York has already filed an amended version of her bill to raise the Empire State’s minimum wage as high as $21.25 per hour. As more jurisdictions reach pre-scheduled tracks to hit a $15 per hour wage, inflation provisions for future annual increases may be up for debate this coming year.
At the federal level, Republican lawmakers in the House and Senate have introduced the Tipped Employee Protection Act, a bill to simplify the definition of tipped restaurant employees. The current Biden administration’s Department of Labor standard currently has several layers of complexity over who and what duties can be compensated using a tip credit, and requires employers to monitor by the minute what types of work tipped employees are engaging in, even if it is work necessary to prepare for tip-earning service. This system leaves employers vulnerable to costly mistakes and employees with less understanding of how their time is compensated.
Instead, the legislation proposed by Sen. Mike Braun (R-IN) and Rep. Steve Womack (R-AR) would ensure tipped employees are defined as those who earn a base wage plus regular tips totaling at least the minimum wage, although on average tipped restaurant employees on average report earning far more than that through their tips.
Stay tuned for additional updates on state and local changes to minimum wages and tip credits in the coming year.