2024 minimum wage by state, scheduled 2025 increases, and employer's guide

2024 minimum wage in each state and scheduled 2025 increases

Further into the article, we’ll go into more detail on where the minimum wage went up, and general things to know about it — whether you’re a new business or you’ve had your doors open for a while. But if you’re just looking for the state-by-state numbers, the table below includes hourly rates and links to each state’s website (where available). Each link will open in a new browser window. Just keep in mind that these numbers can be subject to change.

Now that we’ve reviewed the current minimum wage by state, let’s touch on some history behind the numbers.

When did the federal minimum wage start?

Now that you have an idea of different states’ minimum wages, let’s look at the history of minimum wage laws.

The federal government introduced the first-ever minimum wage under President Franklin D. Roosevelt in 1938, and it was set at a whopping $0.25 per hour. This amount might’ve made sense at the time, but since then, Congress has increased the minimum wage in an attempt to keep up with inflation and rising costs of living. Today, the federal minimum wage sits at $7.25 per hour, and many states pay significantly more than that.

As of 2024, twenty states use the $7.25 minimum wage: Alabama, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Wisconsin, and Wyoming.

Now that we’ve gone over the history, we’ll look at how often the federal minimum wage moves up.

How often does the federal minimum wage change?

Simply put, there is no set schedule for minimum wage increases. Instead, Congress decides whether to increase the federal minimum wage or leave it “as-is.” Historically, increases occur roughly every three to seven years to offset the ever-rising cost of living. The last federal minimum wage increase happened back in 2009 when it was raised to its current $7.25 per hour. Before that update, increases took place in 2008, 2007, 1997, 1996, 1991, and so on. Click here for the DOL’s list of all minimum wage increases since 1938.

In recent decades, the average American’s expenses have far outpaced increases in the federal minimum wage. According to the Bureau of Labor Statistics’ Consumer Expenditures Report, the average annual spending of consumers in the US was $72,967 in 2022, but an employee working full-time and earning $7.25 per hour would only earn $15,080 in gross income annually. Congress is aware of this, and many grassroots organizations are pushing for higher minimum wage laws to be passed.

Next, let’s find out where increases have been put in place since the beginning of the year and if they are set to rise anywhere else.

Did the minimum wage rise anywhere in 2024?

Many states increase their minimum wages periodically – typically every year or two. The following states increased their minimum wages on January 1st, 2024: Alaska, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, New Jersey, New York, Ohio, Rhode Island, South Dakota, Vermont, Washington. Additionally, Oregon and Nevada raised their minimum wage in July. Florida’s increased in September.

Fast-food workers increase in California

In April 2024, California raised the minimum wage for fast-food employees to $20.00. More information here.

The lowest minimum wage states are those that use the federal $7.25 minimum wage, which are Alabama, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Wisconsin, and Wyoming.

Next, let’s talk about minimum wages for tipped employees.

Is the tipped minimum wage the same as the federal minimum wage?

According to minimum wage laws, the total hourly compensation paid to each employee must equal or exceed the federal – or, if higher, state – minimum wage amount. The July minimum wage increase resource states that if an employee earns tips while on the job, their base minimum wage can actually be as low as $2.13 per hour, as long as the tips they receive make up the difference.

But states have their own laws, many of which make the tipped minimum wage much higher. For example, California requires that employees’ base wages cannot fall below the state minimum wage even if they receive tips, while New York has higher tipped minimum wages than the federal $2.13 minimum. Check out our employer’s guide to tipped wages to learn more.

Are there plans for the minimum wage to go up in 2025 or beyond?

In July 2023, the Raise the Wage Act of 2023 was introduced in the House and Senate. The goal of this bill is to raise the federal minimum wage from $7.25 to $17 per hour by 2028. It replaced an earlier bill by the same name, the Raise the Wage Act of 2021, which aimed to increase the minimum wage to $15 by 2025. Neither of these bills have passed the house or senate, so time will tell if they’ll affect the real world.

States may choose to increase their minimum wages for several reasons: to keep up with cost of living, support their residents, encourage economic growth, and make the state look more attractive to potential transplants.

One of the greatest drivers of minimum wage increases is a monthly report issued by the Bureau of Labor Statistics (BLS) called the Consumer Price Index (CPI). The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It’s widely used as an indication of the change in the average cost of living in the United States, and many states use the CPI to determine if they should increase their minimum wage.

Many people believe that the minimum wage should be higher, leading to grassroots efforts to increase minimum wages around the country. Examples of such efforts are the formation of worker’s unions, nonprofits that advocate for workers, and workers striking to demand fair pay. These movements are met with mixed success, but they often spur larger efforts to increase minimum wages over time.

Furthermore, the minimum wage may be on the move in some other states. For example, several bills have been proposed to raise it in Mississippi, and there continues to be talk of an increase in Virginia.

In the state of Missouri, voters approved an initiative to increase the minimum wage. The rate will rise to $13.75 in 2025 and $15.00 in January 2026.

That’s why it’s always a good idea to keep an eye on what’s happening in the state where you do business.

What do employers get mixed up when thinking about the minimum wage?

On the surface, minimum wage laws seem fairly simple: just pay your employees the federal or if higher, what the state requires and do business as usual. But a few things can complicate the matter, such as:

• Tipping employees: as mentioned above, make sure that their total pay equals or exceeds the minimum wage.
• Hiring contractors: while you are not required to pay contractors a minimum wage, it’s good practice to ensure their hourly pay equals or exceeds the minimum wage, as this will help to avoid potential legal or regulatory issues.
• Hiring workers in other countries: US minimum wage laws do not apply to workers in other countries, so make sure you understand the employee’s country’s laws.