Changes to minimum wages in 2021.
For many medium-to-small sized organizations, managing the myriad of federal compliance regulations is a top challenge. In fact, a recent Paycor survey found that 42% of organizations have negative feelings about their compliance management practices. In most instances, compliance management falls squarely on HR’s shoulders, and with limited resources and understaffed departments, keeping up with the many changes that continue to impact the current landscape is a tall task. That challenge is becoming even more daunting with the recent rise in local and state mandates for regulations like paid sick leave, state tax changes, pay equity laws and minimum wage increases.
More than twenty states increased their minimum wages for workers in 2021. These states include Connecticut, Nevada, Oregon, Florida and others. Most of these changes were effective January 1, 2021, but some states have later activation dates. Check the chart to stay up to date on your state’s minimum wage.
To ensure your organization is aware of the latest minimum wage requirements, Paycor has created a breakdown by state.
State Minimum Wage Rates
|State||2020 Minimum Wage||2021 Minimum Wage|
|Alabama||$7.25 (Federal, no state minimum)||$7.25 (Federal, no state minimum)|
|Connecticut||$12.00||$13.00 (effective 8/1/21)|
|Florida||$8.56||$10.00 (effective 9/30/21)|
|Georgia||$5.15 (Employers subject to Fair Labor Standards Act must pay the $7.25 Federal minimum wage.)||$5.15 (Employers subject to the Fair Labor Standards Act must pay the $7.25 Federal minimum wage)|
|Louisiana||$7.25 (Federal, no state minimum)||$7.25 (Federal, no state minimum)|
|Mississippi||$7.25 (Federal, no state minimum)||$7.25 (Federal, no state minimum)|
|Nevada||$8.00||$8.75 (effective 7/1/21)****|
|Oregon||$12.00||$12.75 (effective 7/1/21)******|
|South Carolina||$7.25 (Federal, no state minimum)||$7.25 (Federal, no state minimum)|
|Tennessee||$7.25 (Federal, no state minimum)||$7.25 (Federal, no state minimum)|
|Virginia||$7.25||$9.50 (effective 5/1/21)|
|Wyoming||$5.15 (Employers subject to Fair Labor Standards Act must pay the Federal minimum wage.)||$5.15 (Employers subject to the Fair Labor Standards Act must pay the $7.25 Federal minimum wage)|
The map below shows which states have changes in minimum wages in 2021.
$14.00 rate is for California employers with 26 or more employees. Employers in California with 25 or less employees have a minimum wage of $13.00 per hour. For local minimum wage rules, see our guide to California Minimum Wage by City.
**$11.75 applies to Maryland employers with 15 or more employees. Employers in Maryland with 14 of fewer employees must pay a minimum wage of $11.60 per hour.
***$10.08 rate is for large employers in Minnesota (with annual gross revenues of at least $500,000). Small employers have a minimum wage of $8.21 per hour.
****$8.75 is for Nevada employees who are offered health insurance. Nevada employees who are not offered health insurance must receive $9.75 per hour.
*****$12.00 applies to New Jersey employers who are non-seasonal and with 6 or more employees. Seasonal employees and those working for business who employ 5 or fewer employees must receive $11.00 per hour.
******The increased New York State minimum wage is effective 12/31/2020. Statewide minimum wages apply in areas that are not governed by a higher, local minimum wage ordinance. New York City and Portland Metro are examples of areas—like California—which have local minimum wage rates that exceed the statewide minimum.
You can find minimum wages for tipped employees, here.
What States are Raising the Minimum Wage in 2021?
25 states are raising their minimum wage in 2021. These states are: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Illinois, Maine, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nevada, New Jersey, New Mexico, New York, Ohio, Oregon, South Dakota, Vermont, Virginia and Washington.
In most of these states, the minimum wage will rise on January 1, 2021. However, in Connecticut, Florida, Nevada, Oregon and Virginia, the minimum wage rise will occur later in the year.
Is the Federal Minimum Wage Rising in 2021?
No. The federal minimum wage has remained $7.25 since 2009.
What State Has the Highest Minimum Wage?
The state with the highest minimum wage is California ($14.00). However, this only applies to businesses with 26 or more employees. The state with the highest minimum wage applying to all companies is Washington ($13.69).
If Washington, D.C. were a state, it would have the highest minimum wage ($15.00).
What State Has the Lowest Minimum Wage?
The two states with the lowest minimum wage are Georgia ($5.15) and Wyoming ($5.15). However, employers in Georgia and Wyoming who are subject to the Fair Labor Standards Act must still pay the $7.25 Federal minimum wage.
For nearly 30 years, Paycor has been guiding our clients through big changes to federal, state and local taxes as well as compliance. Check out our Resource Center for the latest compliance updates, industry trends, thought leadership and best practices to help organizations achieve their vision and reach their potential.
Paycor is not a legal, tax, benefit, accounting or investment advisor. All communication from Paycor should be confirmed by your company’s legal, tax, benefit, accounting or investment advisor before making any decisions.
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