2025 Minimum Wage: Preparing for Increases in 21 States

Minimum wage is the lowest wage that employers can pay their employees per hour. Although the federal minimum wage is still $7.25 per hour (a rate that has not changed since 2009), this rate is only relevant in 20 states. The remaining states have implemented higher minimum wage thresholds.  

Many states adjust their own minimum wage rates annually based on the Consumer Price Index (CPI). Some states also have different minimum wage rates for different types of employees, such as tipped workers or food service workers.  

For 2025, 21 states are poised to increase their minimum wage rates on January 1, with several other increases set to become effective later in the year. Employers must stay vigilant to ensure compliance with these changes, as they must comply with both federal and state minimum wage laws. 

Upcoming New Minimum Wage Increases by State 

Alabama Minimum Wage 2025 

• $7.25/hr
• $2.13/hr for tipped employees  

*Alaska Minimum Wage in 2025 

• $11.91/hr, effective January 1, 2025
  • Minimum wage increases to $13.00/hr on July 1, 2025
    
• No tip credit, meaning employers cannot pay less than minimum wage; all tips are in addition to their regular wages
• See labor.alaska.gov for more details 

*Arizona Minimum Wage 2025 

• $14.70/hr, effective January 1, 2025
• $11.70/hr ($3 below minimum wage) for tipped employees
• Some areas of the state may have different minimum wage rates, see azica.gov for more details 

Arkansas Minimum Wage in 2025 

• $11.00/hr for employers with 4+ employees
• $2.63/hr for tipped employees  

*California Minimum Wage 2025 

• $16.50/hr, effective January 1, 2025
  • See the breakdown of California city and county minimum wages 
• No tip credit, meaning employers must pay at least minimum wage; all tips are in addition to their regular wages
• Additional rates may apply to specific industries, see California Department of Industrial Relations for state wage orders  

*Colorado Minimum Wage in 2025 

• $14.81/hr, effective January 1, 2025
  
  • $12.59/hr for unemancipated minors (i.e., remains under control of their parents, whether or not they live with them), effective January 1, 2025
• $11.79/hr for tipped employees, effective January 1, 2025
  
• Some areas may differ, see cdle.colorado.gov for details 

*Connecticut Minimum Wage 2025 

• $16.35/hr, effective January 1, 2025
• $6.38/hr for tipped employees ($8.23 per hour for bartenders)
• See portal.ct.gov for more details 

*Delaware Minimum Wage in 2025  

• $15.00/hr, effective January 1, 2025
• $2.23/hr for tipped employees
• See labor.delaware.gov for more details 

*District of Columbia Minimum Wage 2025 

• $17.50/hr
  
  • Minimum wage rate increase in proportion to consumer price index (CPI) and $12.00 per hour for tipped employees effective July 1, 2025
• $10.00/hr for tipped employees
  
• See does.dc.gov for more details 

*Florida Minimum Wage in 2025  

• $13.00/hr
  • $14.00/hr effective September 30, 2025
• $9.98/hr for tipped employees
  • $10.98/hr for tipped employees effective September 30, 2025
• See floridajobs.org for more details 

Georgia Minimum Wage 2025 

• $7.25/hr
  • $5.15/hr state rate for those not covered by federal minimum wage laws
• $2.13/hr for tipped employees  

Hawaii Minimum Wage in 2025 

• $14.00/hr
• $12.75/hr for tipped employees  

Idaho Minimum Wage 2025 

• $7.25/hr
• $3.35/hr for tipped employees  

*Illinois Minimum Wage in 2025 

• $15.00/hr, effective January 1, 2025
  • $13.00/hr for youth under 18 years old working fewer than 650 hours during the year, effective January 1, 2025
• $9.00/hr for tipped employees (tip credit cannot exceed 40% of minimum wage), effective January 1, 2025
• See gov.illinois.gov for more details 

Indiana Minimum Wage in 2025 

• $7.25/hr
• $2.13/hr for tipped employees  

Iowa Minimum Wage 2025 

• $7.25/hr
• $4.35/hr for tipped employees  

Kansas Minimum Wage in 2025 

• $7.25/hr
• $2.13/hr for tipped employees  

Kentucky Minimum Wage 2025 

• $7.25/hr
• $2.13/hr for tipped employees  

Louisiana Minimum Wage in 2025 

• $7.25/hr
• $2.13/hr for tipped employees  

*Maine Minimum Wage 2025 

• $14.65/hr, effective January 1, 2025
• $7.33/hr for tipped employees, effective January 1, 2025
• See maine.gov for more details 

Maryland Minimum Wage in 2025 

• $15.00/hr
  
  • 85% of state rate for minors
• $3.63/hr for tipped employees
• Other counties may have different rates; see labor.maryland.gov for details 

Massachusetts Minimum Wage 2025 

• $15.00/hr
• $6.75/hr for tipped employees  

*Michigan Minimum Wage in 2025 

• $10.56/hr, effective January 1, 2025
  
  • $8.98/hr for minors, effective January 1, 2025
  • $4.25/hr youth training wage
• $4.00/hr for tipped employees, effective January 1, 2025
• On Feb. 21, 2025:
  • Minimum wage increases to $12.48 per hour; minors wage increases to $10.61 per hour
  • Tipped employee rate increases to $5.99 per hour 

• See michigan.gov for details 

*Minnesota Minimum Wage 2025 

• $11.13/hr, effective January 1, 2025
  • $9.08/hr for youth training wage, effective January 1, 2025
• No tip credit, meaning employers cannot pay less than minimum wage; all tips are in addition to their regular wages
• See dli.mn.gov for details 

Mississippi Minimum Wage in 2025 

• $7.25/hr
• $2.13/hr for tipped employees  

*Missouri Minimum Wage 2025 

• $13.75/hr, effective January 1, 2025
• $6.875/hr for tipped employees, effective January 1, 2025
• See labor.mo.gov for details 

*Montana Minimum Wage in 2025 

• $10.55/hr effective January 1, 2025
  • $4.00/hr for businesses with gross annual sales of $110,000 or less not covered by federal minimum wage law
• No tip credit, meal credit or training wage is allowed
• See erd.dli.mt.gov for details 

*Nebraska Minimum Wage 2025 

• $13.50/hr, effective January 1, 2025
• $2.13/hr for tipped employees
• See nebraskalegislature.gov for details 

Nevada Minimum Wage in 2025 

• $12.00/hr for all employees, including tipped employees
• No tip credit, meaning employers cannot pay less than minimum wage; all tips are in addition to their regular wages  

New Hampshire Minimum Wage 2025 

• $7.25/hr
• Tipped employees must receive 45% ($3.26/hr) of the applicable rate  

*New Jersey Minimum Wage in 2025 

• $15.49/hr, effective January 1, 2025, for 6+ employees
  • $13.40/hr for agriculture employees
  • $14.53/hr for seasonal and small employers with fewer than 6 employees
  • $18.49/hr for long-term care facility employees
• $5.26/hr for tipped employees
• See nj.gov for details 

New Mexico Minimum Wage 2025 

• $12.00/hr
• $3.00/hr for tipped employees
• Smaller jurisdictions have their own minimum and/or tipped employee rates  

*New York Minimum Wage in 2025 

• $16.50/hr effective January 1, 2025, for employees in New York City, Long Island, and Westchester
• $15.50/hr for remainder of state
  • $13.75 per hour for tipped service employees and $11.00 per hour for tipped food service workers in New York City, Long Island, and Westchester; $12.90 per hour for tipped service employees and $10.35 per hour for tipped food service workers for remainder of state
• Additional rates may apply to specific industries, visit NY Department of Labor for more details

North Carolina Minimum Wage 2025 

• $7.25/hr
• $2.13/hr for tipped employees  

North Dakota Minimum Wage in 2025 

• $7.25/hr
• $4.86/hr for tipped employees  

*Ohio Minimum Wage 2025 

• $10.70/hr, effective January 1, 2025
• $5.35/hr for tipped employees, effective January 1, 2025
  • Employers that gross less than $394,000 must pay no less than $7.25 per hour
• See com.ohio.gov for details 

Oklahoma Minimum Wage in 2025 

• $7.25/hr for employers with 10+ full-time employees and/or annual gross sales over $100,000
  • $2.00/hr for those not covered by the Fair Labor Standards Act (FLSA)
• $2.13/hr for tipped employees   

*Oregon Minimum Wage 2025 

• $14.70/hr
  • $15.95/hr in the Portland metro area
  • $13.70/hr in the non-urban counties
• Rate increase TBD based on CPI effective July 1, 2025
  • +$1.25 per hour for urban wage earners in Portland metropolitan area
  • -$1.00 per hour for non-urban counties
• No tip credit, meaning employers cannot pay less than minimum wage; all tips are in addition to their regular wages

Pennsylvania Minimum Wage in 2025 

• $7.25/hr
• $2.83/hr for tipped employees who earn at least $135/month in tips 

*Rhode Island Minimum Wage 2025  

• $15.00/hr, effective January 1, 2025
• $3.89/hr for tipped employees
• See dlt.ri.gov for details 

South Carolina Minimum Wage in 2025 

• $7.25/hr
• $2.13/hr for tipped employees  

*South Dakota Minimum Wage 2025 

• $11.50/hr, effective January 1, 2025
• $5.75/hr for tipped employees, effective January 1, 2025
• See dlr.sd.gov for details 

Tennessee Minimum Wage in 2025 

• $7.25/hr
• $2.13/hr for tipped employees  

Texas Minimum Wage 2025 

• $7.25/hr
• $2.13/hr for tipped employees  

Utah Minimum Wage in 2025 

• $7.25/hr
• $2.13/hr for tipped employees  

*Vermont Minimum Wage 2025 

• $14.01/hr, effective January 1, 2025
• $7.01/hr for tipped employees, effective January 1, 2025 
• See labor.vermont.gov for details
  

*Virginia Minimum Wage in 2025 

• $12.41/hr, effective January 1, 2025
• $2.13/hr for tipped employees
• See doli.virginia.gov for details

*Washington Minimum Wage 2025 

• $16.66/hr, effective January 1, 2025
• No tip credit, meaning employers cannot pay less than minimum wage; all tips are in addition to their regular wages
• Workers 14-15 years old may be paid $14.16 per hour, effective January 1, 2025
• See lni.wa.gov for details 

West Virginia Minimum Wage in 2025 

• $8.75/hr for 6+ employees
• $2.62/hr for tipped employees 

Wisconsin Minimum Wage 2025 

• $7.25/hr
• $2.33/hr for tipped employees  

Wyoming Minimum Wage in 2025 

• $7.25/hr
  • $5.15/hr for those not covered by the FLSA
• $2.13/hr for tipped employees
• $4.25/hr youth training wage 

Federal vs. State Minimum Wage Rates 

When federal and state minimum wage rates differ, employers must pay the higher of the two rates. This ensures that employees receive the best protections available under the law, but it also places the onus on employers to monitor wage changes at both levels. 

Employer Responsibilities for 2025 Wage Adjustments 

For employers operating in states with scheduled minimum wage increases, preparation is key. Companies should do the following:

Review and Adjust Pay Rates 

• Conduct an audit of employee wages to identify any adjustments necessary to meet the new state requirements. 

Update Compliance Materials 

• Replace outdated minimum wage posters and notices with the updated versions mandated by local authorities. 

Communicate Changes 

• Notify employees of wage adjustments, ensuring transparency and adherence to legal obligations. 

By proactively addressing these tasks, businesses can avoid penalties and foster goodwill among their employees. 

Understanding Tipped Employees 

Tipped employees, primarily those in the service industry, have specific wage considerations. According to federal guidelines, tipped employees are those who regularly earn more than $30 per month in tips, though some states set different thresholds. In most cases, employers can pay these workers a reduced base wage, provided the combination of wages and tips equals at least the prevailing minimum wage. 

If an employee’s tips fall short of this benchmark, the employer is required by law to make up the difference. Additionally, employers are strictly prohibited from retaining employees’ tips or allowing managers and supervisors to claim a share. This ensures tips directly benefit the workers who earn them. 

Youth Training Wage 

The Fair Labor Standards Act (FLSA) permits employers to pay workers under 20 years old a reduced "training" wage for the first 90 consecutive calendar days of their employment. This federal youth training wage is currently set at $4.25 per hour, although many states mandate higher rates. 

Key considerations for the training wage include: 

1. Non-Displacement Rule

2. Temporary Nature

3. No Training Requirement

Staying Ahead of Compliance 

As wage laws continue to evolve, employers must stay informed and proactive. Monitoring legislative changes, adjusting payroll systems, and maintaining compliance materials are crucial steps in navigating the complex landscape of minimum wage regulations. By prioritizing these practices, businesses can foster a fair and legally compliant workplace for all employees. 

For questions about FLSA compliance, minimum wage, tipped employees, youth training wage, or other compliance matters, please contact your certified HR expert. Not a current Stratus HR client? Book a free consultation and our team will contact you shortly.  

Sources 

Minimum Wages for Tipped Employees: dol.gov
State Minimum Wage by State: dol.gov