2021 is here and that means one thing for the minimum wage – it is increasing!
Regretfully, it has not increased in all states across the U.S., but we have compiled a list of all the states (nearly half of them) that have increased their minimum wage and the date that this goes into effect.
This year sees 24 states increase their minimum wage, which is good news for workers in those states, but it does also put added pressure on small businesses in the US that have to cope with these increases and balance the additional overhead it creates.
Of the 24 US states that increased their minimum wage in 2021, an impressive 21 of them enacted their increases on Jan 1st. The other three states are set to increase their minimum wage at different dates in 2021.
Currently, the highest statewide minimum wage state is California at $14.00 per hour, with Washington state coming in a close 2nd at $13.69 per hour.
Minimum Wage Increases by State
While California and the state of Washington have the highest statewide minimum wage rate, New York and Oregon both have regional minimum wage rates that are higher than the state as a whole.
For example, New York City increased its minimum wage to $15.00 per hour on Jan 1st and the Portland Metro area of Oregon has increased its minimum wage to $14.00 per hour (effective July 1st, 2021).
On the other end of the scale, the lowest minimum wage rates are $5.15 per hour in Georgia and Wyoming, but most employers are required to pay their employees the federal minimum wage of $7.25 per hour in those states.
It is a challenging time for small businesses in the U.S. because they are already struggling with the effects of the pandemic. The addition of these minimum wage increases is making many businesses decide between keeping people on at a higher rate or having to let them go to try and get more done with less staff.
Here are the Minimum Wage increases by State in 2021
As an employer, you need to keep up with the latest minimum wage rates and make sure your employees are paid the correct amount in 2021. As an employee, you should make sure your employer is paying you fairly and according to the law and know your rights.
1. Alaska – The 2021 rate is $10.34 per hour up 15 cents from 2020 which was $10.19 per hour. The increase is 1.47% and accounts for an increase in the cost of living in the state. School bus drivers are entitled to twice the minimum wage rate – $20.68 per hour.
2. Arizona – the 2021 rate is $12.15 per hour up 15 cents from 2020 which was $12.00 per hour. The increase is 1.25% and is intended to cover the increase in the cost of living in Arizona.
3. Arkansas – the 2021 rate is $11.00 per hour which is a healthy $1.00 increase over 2020 when it was $10.00 per hour. The increase is 10% which should more than cover the cost of living increase in Arkansas.
4. California – the 2021 rate for businesses with 26 employees or more is $14.00 per hour, and for businesses with fewer employees, the rate is $13.00 per hour. Both of these rates increased by $1 from the previous year (2020).
5. Colorado – the 2021 rate is $12.32 per hour which is a solid 32 cents increase over 2020 when it was $12.00 per hour. If your job allows you to be paid in tips in addition to your wage, you can be paid a lower base wage, however, the total of your hourly rate with tips must equal $12.32 or higher.
6. Connecticut – the 2021 rate is $13.00 per hour, which is a generous $1 increase from the 2020 wage of $12.00 per hour. Connecticut’s minimum wage is so high that it actually ranks 4th out of all 50 states!
7. Florida – the 2021 rate is $8.65 per hour, a 1.07% increase from the 2020 rate of $8.56 per hour. The Florida minimum wage has increased gradually over the years, but consistently.
8. Illinois – the 2021 rate is $11.00 per hour, increasing by a healthy $1 over the 2020 rate of $10.00 per hour. This 10% increase is to help coincide with the cost of living increasing.
9. Maine – the 2021 rate is $12.15 per hour, which is 15 cents higher than it was the previous year (2020). The subtle 1.25% increase has helped make what was already a strong minimum wage even stronger!
10. Maryland – the 2021 rate is $11.75 for large employers (15 or more) and for businesses with fewer employees, the rate is $11.60 per hour.
11. Massachusetts – the 2021 rate is $13.50 per hour, which is 75 cents higher than the 2020 minimum wage rate. As the cost of living increases, each year so does the minimum wage.
12. Michigan – the 2021 rate was supposed to be $9.87 per hour, increasing by 22 cents from the 2020 wage of $9.65 per hour. *Update – the Michigan minimum wage did not increase in 2021, it is still $9.65 per hour. Michigan’s unemployment rate is above 8.5% and therefore there is no increase in 2021!
13. Minnesota – the 2021 rate is $10.08 per hour, up from $10.00 per hour in 2020, meaning there was only an 8 cent increase to the minimum wage rate in 2021. This is the min wage rate for businesses that have gross annual sales of over $500,00. For businesses generating less than $500K in revenue, the minimum wage rate is $8.21 per hour in 2021.
14. Missouri – the 2021 rate is $10.30 per hour, which is an 85 cents increase from the 2020 rate of $9.45 per hour. The 8.9% increase is to coincide with the cost of living going up.
15. Montana – the 2021 rate is $8.75 per hour, which is a 10 cents increase from 2020 when the Montana minimum wage was at $8.65 per hour.
16. New Jersey – the 2021 rate is $12.00 per hour, which is a $1.00 increase from the 2020 rate. The minimum wage is $11.10 per hour for seasonal workers, and employees working for a business with 6 or fewer employees.
17. New Mexico – the 2021 rate is $10.50 per hour, which is an incredible $1.50 increase per hour from the 2020 rate! This is an increase of over 16.5%.
18. New York – the 2021 rate is $12.50, this is the statewide rate for New York in 2021 (increasing from $11.80 in 2020). However, the minimum wage for New York City is $15.00 per hour, and $14.00 per hour in Nassau, Suffolk, and Westchester counties.
19. Nevada – the 2021 rate is $9.75 per hour (effective – July 1st, 2021), which is a 75 cents increase (8.3%) from the 2020 rate of $9.00 per hour.
20. Ohio – the 2021 rate is $8.80 per hour, which is 10 cents higher than the previous minimum wage rate of $8.70 (2020), increasing by just 1.4%.
21. Oregon – the 2021 rate is $12.00 per hour, increasing by 75 cents from the year before (2020). This is the minimum wage rate for nonurban counties, the 2021 minimum wage rate for the Portland Metro area is $14.00 per hour, and $12.75 for all other areas within the state.
22. Pennsylvania – the 2021 rate is $7.25 for those that work for private employers; however, if you are employed under the Governer’s jurisdiction the minimum wage is $13.50 per hour for 2021.
23. South Dakota – the 2021 rate is $9.45 per hour, which is 15 cents higher than the 2020 rate of $9.30 per hour. The minimum wage has increased due to the cost of living increasing.
24. Vermont – the 2021 rate is $11.75 per hour, and the previous year’s minimum wage rate was $10.96 per hour (2020) – a 79 cents increase. This percentage increase of 7.2% accounts for inflation and cost of living increases.
25. Washington – the 2021 rate is $13.69, which is only a 19 cents increase from the 2020 wage of $13.50 per hour. This small increase works out as just over 1.4%, but Washington state’s minimum wage is still the second-highest in the U.S.
US Map Showing the Minimum Wage Increases in 2021