- October 10, 2022
- Posted by: FLORES
- Categories: Accounting, Business Strategy
Minimum Wage Updates for 2023
Effective January 1, 2023 minimum wage is set to increase for many. Are you prepared for the financial impact and payroll changes needed to comply with the new wage rates?
One of the most notable increases for many of our Southern California clients is the 9% increase for the city of San Diego employers. The city has deemed the min wage ordinance to be $16.30 at the start of the new year. This deviates higher from the state of California which is set to raise to $15.50. Wage increases can be a difficult challenge for employers if not strategically prepared for. What are some key ways you should be planning for your business to effectively operate under the new wage mandates?
- Complete your budgets and labor forecast models for 2023. It is crucial that you budget for the increased labor costs and have clear picture of what the increases will do to your business profit/loss margins. Knowing the impact of the labor costs will allow you as an operator to financially make budget decisions in other areas of your business in order to maintain steady operations and net profit.
- Ensure your payroll team is prepared to process the increases and your back end support is aligned with ensuring your staff is properly paid with proper wage earnings as of the first of the new year.
- Be prepared for wage compression and how you will handle such conversations and decisions for your business. Minimum wage increases most often lead to wage compression issues, meaning if a person is currently 5% above minimum wage rates, they may expect to be 5% above in the coming year as well which could me more raises for employees already above the minimum wage threshold. In what is already a difficult labor market your plan must be rock solid in addressing these types of issues so as to set clear communication and not cause operational disruption.
Here is a complete listing of minimum wages for the United States in 2023. These tables are subject to change pending legislation and local ordinances. If you need help preparing for how these wage increases will affect your business our FLORES team can help. We are here to strategically support your operation and help our clients achieve success.
| State | 2022 Minimum Wage | 2023 Minimum Wage (effective 1/1/23 except as noted) | % Increase |
| Alabama | $7.25 (Federal, no state minimum) | ||
| Alaska | $10.34 | ||
| Arizona | $12.80 | ||
| Arkansas | $11.00 | ||
| California | $15.00 for businesses with 26+ employees | $15.50 minimum will apply to ALL employers | 3% |
| CA- City of San Diego | $15.00 | $16.30 | 9% |
| CA- County of Los Angeles | $15.00 | $15.96 | 6% |
| CA- City of El Cerrito | $16.37 | $17.35 | 6% |
| CA- City of San Mateo | $16.20 | $16.75 | 3% |
| Colorado | $12.56 | ||
| Connecticut | $14.00 | $15.00 effective 6/1/23 | 7% |
| Delaware | $10.50 | $11.75 | 11% |
| Washington D.C. | $15.20 | ||
| Florida | $11.00 | $12.00 effective 9/30/23 | 9% |
| Georgia | $5.15 (Employers subject to the Fair Labor Standards Act must pay the $7.25 Federal minimum wage) | ||
| Hawaii | $10.10 | ||
| Idaho | $7.25 | ||
| Illinois | $12.00 | $13.00 | 8% |
| Indiana | $7.25 | ||
| Iowa | $7.25 | ||
| Kansas | $7.25 | ||
| Kentucky | $7.25 | ||
| Louisiana | $7.25 (Federal, no state minimum) | ||
| Maine | $12.75 | ||
| Maryland | $12.50 | ||
| Massachusetts | $14.25 | $15.00 | 5% |
| Michigan | $9.87 | $10.10 | 2% |
| Minnesota | $10.33 | Annual increases begin 1/1/23 | |
| Mississippi | $7.25 (Federal, no state minimum) | ||
| Missouri | $11.15 | $12.00 | 8% |
| Montana | $9.20 | Annual increases begin 1/1/23 | |
| Nebraska | $9.00 | ||
| Nevada | $9.50* | $11.25 | 18% |
| New Hampshire | $7.25 (Federal, no state minimum) | ||
| New Jersey | $13.00 | $14.00 (Businesses with fewer than 6 employees and seasonal employees pay $12.70) | 8% |
| New Mexico | $11.50 | $12.00 | 4% |
| New York | $13.20 (fast food– $15.00) | ||
| North Carolina | $7.25 (Federal, no state minimum) | ||
| North Dakota | $7.25 (Federal, no state minimum) | ||
| Ohio | $9.30 | Annual increases begin 1/1/23 | |
| Oklahoma | $7.25 | ||
| Oregon | $13.50 | Annual increases begin 7/1/23 | |
| Pennsylvania | $7.25 (Federal, no state minimum) | ||
| Rhode Island | $12.25 | $13.00 | 6% |
| South Carolina | $7.25 (Federal, no state minimum) | ||
| South Dakota | $9.95 | ||
| Tennessee | $7.25 (Federal, no state minimum) | ||
| Texas | $7.25 (Federal, no state minimum) | ||
| Utah | $7.25 (Federal, no state minimum) | ||
| Vermont | $12.55 | Annual increases begin 1/1/23 | |
| Virginia | $11.00 | $12.00 | 9% |
| Washington | $14.49 | ||
| West Virginia | $8.75 | ||
| Wisconsin | $7.25 (Federal, no state minimum) | ||
| Wyoming | $5.15 (Employers subject to the Fair Labor Standards Act must pay the $7.25 Federal minimum wage) |
If you need help preparing for how these wage increases will affect your business our FLORES team can help. We are here to strategically support your operation and help our clients achieve success.
Contact us at 619-588-2411