Minimum Wage Updates for 2021

Minimum wage initiatives passed in many states during the 2020 election cycle. Find out what states, counties, and cities are increasing their minimum wages in 2021.

Editor’s Note: We updated this story on November 19, 2020, to include minimum wage increases going into effect in 2021.

While the United States federal minimum wage continues at the same rate since 2009 — $7.25 — many states, counties, and cities have been working to bring salaries up over the past few years. Effective for 2021, these state’s minimum wage requirements will increase from their current rate to the new rate provided.

New 2021 minimum wage requirements, by state: 

Alaska: $10.34

Arizona: $12.15

Arkansas: $11

California:

  • $13 for small employers (25 or less employees)
  • $14 for large employers (26 or more employees)

Colorado: $12.32 (proposed)

Connecticut: $13 (effective August 1, 2021)

Delaware: $10.25 (effective October 21, 2021)

District of Columbia: (increase to be announced effective July 1, 2021, pursuant to Consumer Price Index)

Florida: $10

Illinois: $11 (effective July 1, 2021)

Maine: $12.15

Maryland: $11.75

  •  $11.60 for small employers (25 or less employees)
  • $11.75 for large employers (26 or more employees)

Massachusetts: $13.50

Michigan: $9.87

Minnesota: 

  • $8.21 for small employers (less than $500k in annual sales) 
  • $10.08 for large employers (over $500k in annual sales)

Missouri: $10.30

Montana: $8.75

Nevada: (effective July 1, 2021)

  • No health insurance benefits provided by employer and received by employee: $9.75
  • Health insurance benefits provided by employer and received by employee: $8.75

New Jersey:

  • $12 for most employers
  • $11.10: seasonal and/or small employers (less than 6 workers)
  • $10.44: agricultural employers

New Mexico: $10.50

New York State(effective July 1, 2021)

  • $12.50
  • Fast food workers: $15.00

Ohio: $8.80 for employers with over $323,000 in annual gross receipts

Oregon: $12.75 (effective July 1, 2021)

South Dakota: $9.45

Vermont: $11.75

Virginia: $9.50 (effective May 1, 2021)

Washington: $13.69

minimum wages 2021

wdt_ID State City or County Minimum Wage Rate 2020 Minimum Wage Rate 2021 Tipped Employee Rate 2021
1 Alabama $7.25 $7.25
2 Alaska $10.19 $10.34 $10.34
3 Arizona $12.00 $12.15 $9.15
4 Arkansas $10.00 $11.00 $2.63
5 California 26 or more employees: $14; 25 or less employees: $13
6 California Alameda  $15.00
7 California Belmont $15.90
8 California Berkeley 16.07 plus CPI
9 California Burlingame  $15.00
10 California Cupertino  15.65 plus CPI

New 2021 minimum wage requirements in cities and counties

Many local areas have also made increases to their minimum wage beginning in 2021:

California 

Colorado

Illinois: (effective July 1, 2021)

New York

Oregon: (effective July 1, 2021)

Washington:

  • Seattle: $16.69 (for large employers — 501 or more employees)
  • SeaTac: $16.57

New 2021 minimum wage requirements for tipped employees

For workers in the service and hospitality industries, tips are a significant portion of salary. At the federal level, tipped employees may be exempt from the prevailing minimum wage of $7.25 per hour based on tips received.

Under the Fair Labor Standards Act, businesses can pay tipped workers the federal rate of $2.13 per hour. To do so, the worker must earn a maximum “tip credit” against minimum wage, or $5.12 per hour to qualify. This tip credit, plus actual wages, puts the minimum wage for workers at $7.25 per hour. Per federal law, a worker must receive a minimum of $30 per month in tips to qualify.

Some states and localities have eliminated the tip credit, requiring employers pay tipped workers minimum wage according to regional mandates. For workers who expect to receive the majority of their salary through tips, these states have enacted minimum wage guidelines irrespective of the amount of tips received for 2021:

Alaska: $10.34

Arizona: $9.15

Arkansas: $2.63 — for employers with 4 or more staff members

California: current minimum wage based on location

Colorado: $9.30 — proposed

Connecticut: $6.38 tipped workers/$8.23 bartenders (effective August 1, 2021)

Delaware: $2.23  (effective October 21, 2021) 

Florida: $5.63 (effective September 30, 2021)

Illinois: $6.60

  • Cook County: $8.40 (effective July 1, 2021)
  • Chicago: $9.00 (effective July 1, 2021)

Maine: $6.08

Maryland: $3.63

Massachusetts: $5.55

Minnesota:

  • Businesses with less than $500,000 annual revenue: $8.21
  • Businesses with over $500,000 annual revenue: $10.08

Missouri: $4.75

Montana:

  • Businesses with less than  $110,000 annual revenue:  $4.00
  • Businesses with over $110,000 annual revenue: $8.75

Nevada: current minimum wage based on healthcare option

New Jersey: $4.13

New Mexico: $2.55

New York State: $8.35

  • New York City: $10.00

Ohio: $4.40

Oregon: current minimum wage based on location

Vermont: $5.88

Washington: current minimum wage based on location

Many states do not require a separate minimum wage for workers who receive tips and gratuities on the job. In these states with no tip exemption, the federal tipped worker rate of $2.13 applies:

  • Alabama
  • Georgia
  • Indiana
  • Kansas
  • Kentucky
  • Louisiana
  • Mississippi
  • Nebraska
  • North Carolina
  • Oklahoma
  • South Carolina
  • Tennessee
  • Texas
  • Utah
  • Virginia
  • Wyoming

It’s important to assure your SMB is compliant with minimum wage laws — federally and locally. New laws are enacted throughout the year, so keep an eye on what’s going on in your community to make sure you’re paying staff members appropriately.

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