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2021 US Minimum Wage Rates: State by State Updates

December 4, 2020 - minute read

Minimum wage is typically defined as the lowest hourly pay that workers can earn. Straight-forward as it may seem, the process of maintaining compliant rate changes isn't always easy. For federal and state governments, the minimum wage for employees in private and public sectors is determined by the Fair Labor Standards Act (FLSA), which requires non-exempt employees to be paid the minimum wage or higher. In 2021, that minimum wage will remain at $7.25 per hour. However, as the federal minimum wage rate has not changed since July 2009, many states, cities, and counties have set their own minimum wage.

It is, therefore, important to note that if any of your employees fall into a category where their state rate(s) conflict with the established federal rate, you are required to pay them the higher of the two wages. Furthermore, if you're still depending on manual or internal payroll processing systems to keep these requirements straight, it could be a huge risk to your bottom line and compliance. Switching to an automated payroll solution is an efficient way to effortlessly track all evolving rates and payroll details within your organization. Either way, it is beneficial to review each of your state or states' 2021 minimum wage requirements to ensure your systems are prepared for the months ahead.

2021 Minimum Wage for Federal Contract Workers

Beginning January 1, 2021, workers connected to or working under federal contracts will be paid a minimum of $10.95 per hour. Contracted employees that earn tips must earn a new minimum wage for 2020 of $7.65 per hour.

Federal Minimum Wage Exemptions

Employees who are not protected under the Fair Labor Standards Act, such as restaurant servers who earn tips, can be paid lower than the federal minimum wage of $7.25.

Minimum Wage Rates By State: 2021

Twenty nine states, as well as Washington D.C., have a minimum wage higher than the federal minimum wage. Below are each state’s minimum wage rates for 2021:

  • Alabama: $7.25
  • Alaska: $10.34
  • Arizona: $12.15
  • Arkansas: $11.00
  • California: $14.00
  • Colorado: $12.32
  • Connecticut: $12.00
  • Delaware: $9.75 (increase to $10.25 effective Oct. 1, 2021)
  • District of Columbia: $15.00 (beginning 2021, minimum wage will increase each year in proportion to cost of living as indicated by the Consumer Price Index for both tipped and non-tipped employees)
  • Florida: $8.65
  • Georgia:$7.25 ($5.15 when not covered by federal regulations)
  • Guam: $8.75 (increase to $9.25 effective March 2021)
  • Hawaii: $10.10
  • Idaho: $7.25
  • Illinois: $10.00
  • Indiana: $7.25
  • Iowa: $7.25
  • Kansas: $7.25
  • Kentucky: $7.25
  • Louisiana: $7.25
  • Maine: $12.15
  • Maryland: $11.75
  • Massachusetts: $13.50
  • Michigan: $9.87
  • Minnesota: $10.08, ($8.21 for employers with less than $500,000 in annual sales)
  • Mississippi: $7.25
  • Missouri: $10.30
  • Montana: $8.75 ($4.00 for businesses with $110,000 or less in gross annual sales)
  • Nebraska: $9.00
  • Nevada: $9.75 (effective July 2020 if benefits are not offered, $8.75 if benefits are offered)
  • New Hampshire: $7.25
  • New Jersey: $12.00
  • New Mexico: $10.50
  • New York: $12.50 ($15.00 for fast food workers effective July 1, 2021)
  • North Carolina: $7.25
  • North Dakota: $7.25
  • Ohio: $8.80
  • Oklahoma: $7.25
  • Oregon: $12.75 (effective July 1, 2021, $14.00 in Portland Metro, $12.00 in nonurban counties)
  • Pennsylvania: $7.25
  • Puerto Rico: $6.55 ($7.25 for employers covered by the Federal Fair Labor Standards Act)
  • Rhode Island: $11.50
  • South Carolina: $7.25
  • South Dakota: $9.45
  • Tennessee: $7.25
  • Texas: $7.25
  • Utah: $7.25
  • Vermont:$11.75 ($5.88 for tipped employees)
  • Virgin Islands: $10.50
  • Virginia: $9.50 (effective May 1, 2021)
  • Washington: $13.69
  • West Virginia: $8.75
  • Wisconsin: $7.25
  • Wyoming: $7.25


Cities and Counties with Higher A Minimum Wage: 2021

Some cities and counties also have minimum wage rates higher than their state’s minimum wage. The 52 cities/counties who have a higher minimum wage than their state include:

  • Alameda, California
  • Albuquerque, New Mexico
  • Belmont, California
  • Berkeley, California
  • Bernalillo County, New Mexico
  • Birmingham, Alabama
  • Chicago, Illinois
  • Cook County, Illinois
  • Cupertino, California
  • El Cerrito, California
  • Emeryville, California
  • Flagstaff, Arizona
  • Fremont, California
  • Half Moon Bay, California
  • Hayward, California
  • Las Cruces, New Mexico
  • Los Altos, California
  • Los Angeles County, California
  • Los Angeles, California
  • Malibu, California
  • Milpitas, California
  • Minneapolis, Minnesota
  • Montgomery County, Maryland
  • Mountain View, California
  • Nassau, Suffolk, and Westchester Counties, New York
  • New York City, New York
  • Novato, California
  • Oakland, California
  • Palo Alto, California
  • Pasadena, California
  • Petaluma, California
  • Portland Urban Growth Boundary, Oregon
  • Portland, Maine
  • Prince George’s County, Maryland
  • Redwood City, California
  • Richmond, California
  • Rockland, Maine
  • Saint Paul, Minnesota
  • San Carlos, California
  • San Francisco, California
  • San Jose, California
  • San Leandro, California
  • San Mateo, California
  • Santa Clara, California
  • Santa Fe City, New Mexico
  • Santa Fe County, New Mexico
  • Santa Monica, California
  • Santa Rosa, California
  • Seatac, Washington
  • Seattle, Washington
  • Sonoma, California
  • Sunnyvale, California

Staying Compliant is Easier With EPAY

Maintaining compliance with federal minimum wage laws can be confusing, as minimum wage varies between states, as well as between cities, counties, and types of workers. Luckily, EPAY Systems has a customizable workforce management (WFM) solution that can streamline your payroll and tax processes with ease.

Our solution handles unlimited pay rates, time collection rules, and shift differentials just to name a few. Imagine being able to update minimum wage rates by worksite and location- or processing multiple wage rates per employee with absolute accuracy and efficiency. Whether you're taking on new tax rules, garnishment compliance, or the multitude of other payroll details that can fall to the wayside... our system will always have your back.

EPAY was built for hourly business just like yours. Get a personalized demo today to see how our solutions can benefit you. Contact us today.

Filed Under: Compliance Payroll & Tax California Human Resources