Guide to 2025 Minimum Wages
Guide to 2025 Minimum Wages
Starting January 1, 2025, more than 20 states and nearly 40 local jurisdictions will implement increases to their minimum wage rates. Below, we’ve provided a summary of these changes along with helpful guidelines to ensure compliance with minimum wage requirements.
State Minimum Wage Updates
The table below outlines the minimum wage increases announced for January 1, 2025, across applicable states. Some states regularly adjust their rates annually to account for inflation, but a few have not yet announced their 2025 rates. For these states, the table will note their rate as “TBD.” The information provided focuses solely on changes effective as of January 1, 2025. Stay tuned for updates if additional announcements are made.
This summary is here to help you stay informed and ensure your payroll remains in compliance as the new year begins!
| State | Hourly minimum wage rate effective 1/1/25 |
| Alaska | $11.91 |
| Arizona | $14.70 |
| California | $16.50 Note: Voters rejected a November 5, 2024 ballot initiative that would have further increased the minimum wage. |
| Colorado | $14.81 (proposed) |
| Connecticut | $16.35 |
| Delaware | $15.00 |
| Illinois | $15.00 |
| Maine | $14.65 |
| Michigan | $10.56 Note: On February 21, 2025, Michigan’s minimum wage will increase again, to $12.48. |
| Minnesota | $11.13 (all employers) |
| Missouri | $13.75 |
| Montana | $10.55 |
| Nebraska | $13.50 |
| New Jersey | $15.49 (employers with six or more employees) $14.53 (seasonal employers and employers with fewer than six employees) |
| New York | $16.50 per hour (New York City, Long Island and Westchester County) $15.50 per hour (rest of the state) |
| Ohio | $10.70 (employers with annual gross receipts of more than $394,000 per year) |
| Rhode Island | $15.00 |
| South Dakota | $11.50 |
| Vermont | $14.01 |
| Virginia | $12.41 |
| Washington | $16.66 |
Local Minimum Wage Updates
Many cities and counties will also implement minimum wage increases effective January 1, 2025. Some local jurisdictions adjust their rates annually to account for inflation, though a few have yet to announce their 2025 updates.
The table below highlights announced local rate changes for 2025, along with jurisdictions that typically make annual adjustments but have not yet released their updated rates (noted as “TBD”). This information specifically focuses on changes taking effect on January 1, 2025, to help you prepare and stay compliant.
| Local Jurisdiction | Hourly minimum wage rate effective 1/1/25 |
| Flagstaff, Arizona | $17.85 |
| Tucson, Arizona | $15.00 |
| Belmont, California | $18.30 |
| Burlingame, California | $17.48 |
| Cupertino, California | $18.20 |
| Daly City, California | $17.07 |
| East Palo Alto, California | $17.45 |
| El Cerrito, California | $18.34 |
| Foster City, California | $17.40 |
| Half Moon Bay, California | $17.47 |
| Hayward, California | $17.36 (26 or more employees) |
| $16.50 (25 or fewer employees) | |
| Long Beach, California | TBD (other than hotel/concessionaire workers) |
| Los Altos, California | $18.20 |
| Menlo Park, California | $17.10 |
| Mountain View, California | $19.20 |
| Novato, California | $17.27 (100 or more employees) |
| $17.00 (26 to 99 employees) | |
| $16.50 (25 or fewer employees) | |
| Oakland, California | $16.89 $18.36 (Hotel workers with health benefits) $24.48 (Hotel workers without health benefits) |
| Palo Alto, California | $18.20 |
| Petaluma, California | $17.97 |
| Redwood City, California | $18.20 |
| Richmond, California | $17.77 (Employer pays less than $1.50 per hour toward medical benefits) |
| $16.50 (Employer pays at least $1.50 per hour toward medical benefits) | |
| San Carlos, California | $17.32 |
| San Diego, California |
$17.25 |
| San Jose, California | $17.95 |
| San Mateo, California | $17.95 |
| San Mateo County, California (unincorporated areas only) | $17.46 |
| Santa Clara, California | $18.20 |
| Santa Rosa, California | TBD |
| Sonoma, California | $18.02 (26 or more employees) |
| $16.96 (25 or fewer employees) | |
| South San Francisco, California | $17.70 |
| Sunnyvale, California | $19.00 |
| West Hollywood, California | $19.65 |
| Boulder County, Colorado (unincorporated areas only) | $16.57 |
| Denver, Colorado | $18.81 |
| Edgewater, Colorado | $16.52 |
| Portland, Maine | $15.50 |
| Rockland, Maine | $15.38 |
| Howard County, Maryland | $16.00 (15 or more employees) |
| St. Paul, Minnesota | $15.97 (101 or more employees) |
| Albuquerque, New Mexico | $12.00 (state minimum wage) |
| Las Cruces, New Mexico | $12.65 |
| Bellingham, Washington | $17.66 Note: On May 1, 2025, Bellingham’s minimum wage will increase again. |
| King County, Washington (unincorporated areas only) | $18.29 (16-499 employees) $18.29 (15 or fewer employees and annual gross revenue of $2 million or greater) |
| $17.29 (15 or fewer employees and an annual gross revenue of less than $2 million) | |
| Renton, Washington | $18.90 (15 to 500 employees worldwide) $18.90 (1 to 14 employees with over $2 million of annual gross revenue in Renton) |
| Seattle, Washington | $20.76 |
| SeaTac, Washington | $20.17 (Hospitality and transportation employees) $20.10 (15 to 500 employees) |
| Tukwila, Washington | $20.10 (fewer than 15 employees and over $2 million of annual gross revenue in Tukwila) $16.66 (fewer than 15 employees and earn $2 million or less in annual gross revenue in Tukwila) |
Additional Wage Considerations
Tipped Employees
In some jurisdictions, the minimum cash wage for tipped employees increases alongside the standard minimum wage.
Note: some states, including Alaska, California, Minnesota, and Montana, do not permit tip credits. In these states, tipped employees must receive the full minimum wage as direct cash wages. Be sure to review your state and local laws to ensure compliance with tipped employee wage requirements.
Navigating Multiple Minimum Wage Rates
When an employee is subject to more than one minimum wage law—such as federal, state, and local—you are required to pay the rate that is most favorable to the employee.
If your business operates in one state but employs remote workers in another, the minimum wage of the jurisdiction where the employee performs the work usually applies.
Important Note: Some minimum wage requirements are based on factors like business size or the number of hours an employee works in a specific jurisdiction. Always review your state and local laws to ensure full compliance.
Employees Earning Above Minimum Wage
When the minimum wage increases, some employers choose to give raises to employees who are already earning at or above the new rate. While you are not required to do so, it’s important to consider that some employees may anticipate a raise.
Factors to evaluate include the potential impact on labor costs, employee morale, and internal equity—ensuring fair pay among employees with similar skills and experience. Additionally, think about how this aligns with your company’s typical merit increase schedule. Balancing these considerations can help maintain a positive workplace culture and retain valued team members.
Updated Posters and Notices
Many jurisdictions require employers to display the latest minimum wage notice prominently in the workplace. Ensure your postings are up to date to remain compliant.
Additional Increases in 2025
Certain jurisdictions implement minimum wage changes later in the year. Stay informed about these mid-year adjustments to ensure compliance throughout the year.
Overtime Exemptions
In certain states, such as Alaska, California, Colorado, Maine, New York, and Washington, the minimum salary required to classify an employee as exempt from overtime is linked to the minimum wage or is adjusted annually alongside it. As a result, these salary thresholds will also increase on January 1, 2025. Effective January 1, 2025 all California Exempt employees must receive a minimum annual salary of $68,640
Important Note: To qualify for an overtime exemption, both state and federal laws require that specific duties tests are also met. Be sure to review these requirements to ensure compliance.
Conclusion
Make sure you are familiar with the minimum wage rules that apply to your employees and update your payroll before January 1, 2025. Don’t forget to display updated minimum wage notices at each work location to ensure compliance.