UPDATES: Since we published this article, the following updates occurred.

• We have updated the 2022 rate information for Palo Alto, California. Originally, the city announced a $16.25 rate, but in a revised announcement uses a $16.45 rate.
• We have updated the 2022 rate information for South San Francisco, California. Originally, the city announced a $15.55 rate, but in a revised announcement uses a $15.80 rate.
• Michigan announced that in 2022 its minimum wage will be $9.87 per hour and the minimum cash wage for tipped employees will be $3.75 per hour
• In Albuquerque, New Mexico, the city announced that, for 2022, the minimum wage will be $11.50 per hour (the state rate) and the minimum cash wage for tipped employees will be $6.90 per hour

Minimum wage laws can affect businesses of all sizes, whether operating nationwide, in multiple jurisdictions, or only in one state, county, or city. To help manage this challenge, below we provide a rates-only update that details scheduled state- and local-level wage increases that will occur on January 1, 2022 (or December 31, 2021 in New York) so employers can determine the minimum amount they must pay non-exempt, tipped, and certain exempt employees. Although additional rate changes will occur later in 2022, we limit our focus in this article to those that will ring in the new year, and will cover later updates via our mid-year rates article.

Fall 2021 Changes: Before we look forward to 2022, let’s take a quick look at some notable rate-related changes that occurred or took effect in the second half of 2021 (after we published our 2021 mid-year update):

• On June 20, Maine LD 1489 was enacted without the governor’s signature, and, effective October 18, 2021, increases (in 2022, 2023, and annually afterwards) the amount of tips an employee must receive to be a “service employee,” which affects whether employers can count tips toward the minimum wage. On January 1, 2022, the threshold increases from $30 to $100 per month.
• On June 30, Colorado’s Department of Labor & Employment issued Interpretive Notice & Formal Opinion #1A, in which it explained how it translated the required weekly minimum salary for overtime-exempt executives, administrative and professional employees into an annual amount: “[A]nnual salary equivalents are based on 2080 hours worked over the course of 52 weeks (assuming 40 weekly hours), and are rounded to the nearest dollar.”
• In Maine, on July 6, the Supreme Judicial Court held that the voter-approved November 3, 2020 ballot measure establishing an emergency minimum wage (1.5 times the minimum wage) in Portland was constitutional but would not take effect until January 1, 2022.
• On July 9, Pennsylvania’s governor signed HB 336, which, effective September 7, 2021, repeals regulations concerning the administrative, executive, and professional exemptions that included a minimum salary or fee amount that exceeded the rate under federal law.
• On July 19, Delaware enacted SB 15, which gradually increases the minimum wage, starting on January 1, 2022 through 2025 (when it will be $15 per hour).
• On July 23, New Hampshire enacted SB 137, a "trigger law" (effective date TBD) that provides, if the federal minimum wage increases, under state law the list of tipped employees for whom an employer can count tips toward payment of the minimum wage will expand to include cigar bar employees, and the tipped employee minimum cash wage (MCW) would change from 45% of the minimum wage to $3.27 or the federal MCW (whichever is greater).
• At its July 27 meeting, the Port of Seattle adopted Resolution 3789, requiring employers that provide goods or services at SeaTac Airport that are engaged in preparing food or beverages to be served in-flight by an airline from facilities located on property owned by the Port in SeaTac comply with the City of SeaTac’s minimum wage ordinance (and worker retention provisions).
• On August 1, Connecticut’s minimum wage and minimum cash wage increased by $1.00 per hour to $13 and $6.63 or $4.77 (depending on whether the employee is a tipped employee in a hotel / restaurant or a bartender, respectively).
• On October 5, 2021, Alaska’s Department of Labor & Workforce Development announced that the minimum wage (and, as a result, various exempt employee pay amounts) would not increase in 2022 because the consumer price index for annual adjustments decreased 1.1%.
• Published October 28 and effective December 28, 2021, the U.S. Department of Labor’s final “dual jobs” rule resurrects the so-called “80/20 Rule” that governs how tipped employees must be paid under the Fair Labor Standards Act (which can affect when an employer can apply a tip credit toward its minimum wage payment obligation).
• At a November 2 election, voters in Tucson, Arizona appear to have approved a ballot measure creating a minimum wage ordinance (and establishing numerous other wage payment laws). Beginning April 1, 2022 (no joke), the measure will require a $13.00 minimum wage, and for tipped employees a $3.00 tip credit and $10.00 minimum cash wage. There will be future set increases in 2023 through 2025, with annual adjustments starting in 2026.

Minimum Wage, Minimum Cash Wage & Tip Credit Changes: Directly below we highlight states, counties, and cities where the minimum wage that generally applies¹ will increase on/around January 1, 2022, along with the amount the rate changes. Note, however, that if a rate will not change, we do not include that information. Additionally, for tipped employees, we chart changes to the minimum cash wage such employees must receive, and the maximum tip credit employers may apply toward the minimum wage. Due to unique circumstances involving local minimum wages in New Mexico, and for tipped employees in New York, we discuss those requirements separately, after this chart.

New Mexico

In unincorporated Bernalillo County, the local ordinance requires the city to adjust the minimum wage rate annually based on consumer price index changes. For 2021, the city announced an adjusted rate that was less than what state law requires, and said online that state law superseded the ordinance. For 2022, the rate, once adjusted for consumer price index changes, also would continue to be less than what state law provides, which likely explains why Bernalillo County has not announced an adjusted rate for 2022, so employers in Bernalillo County should continue to follow state law regarding minimum wage requirements.   

Las Cruces, however, takes a different approach. Like Bernalillo County, the local ordinance expressly sets the applicable rate as the prior year’s local rates with a CPI adjustment. But in the announcements for 2021 and 2022, the city says, rather than use the CPI-adjustment the ordinance requires (like Bernalillo County did), it would use the state minimum wage rate as its local rate, which then affects the local minimum cash wage rate for tipped employees (40% of the adjusted local rate). For 2022, the announced minimum wage, minimum cash wage, and tip credits are, respectively, $11.50 ($1.00), $4.60 (40₵), and $6.90 (60₵).

In 2021, Albuquerque took an approach similar to that of Las Cruces. At the time of publication, it has not made a 2022 announcement, so it is unclear whether it will continue on this path or reexamine the situation and take a position akin to Bernalillo County’s in 2021.

Finally, in the City of Santa Fe, a slightly different situation exists. Unlike Albuquerque, Bernalillo County, and Las Cruces, on January 1, 2022, the minimum wage rate under its local law will (continue to) exceed the rate under state law; however, because the local ordinance sets a minimum wage rate only, and does not discuss a minimum cash wage or maximum tip credit, state law fills this gap, so to speak, because it sets a minimum cash wage for tipped employees.  That rate will increase on January 1, 2022, meaning, on January 1, 2022, the Santa Fe minimum wage, minimum cash wage, and maximum tip credit will be, respectively, $12.32 (No Change), $2.80 (25₵), and $9.52 (-25₵). Note that these numbers could change a few months later, on March 1, 2022, when the city annually adjusts its minimum wage rate.

New York

Because New York tipped employee standards can be complicated, we give the Empire State its own section. On December 31, 2021, half of the state’s minimum wage rates will increase.⁹ Outside the Hospitality Wage order, and for fast food workers, state law prohibits tip credits, so employers must pay employees the full minimum wage. Under the Hospitality Wage Order, however, employers can continue to apply a tip credit, but standards differ depending on whether the employee is a “service employee” or a “food service worker.”

Employers must directly pay “service employees” and “food service workers” at least the Minimum Cash Wage and cannot claim a tip credit that exceeds the Maximum Tip Credit. Additionally, for service employees, employers’ ability to claim the tip credit depends on an employee’s weekly tip average equaling at least the hourly Tip Threshold and their direct wage plus tips equaling or exceeding the minimum wage.

Exempt Employees

Executive, Administrative and/or Professional Employees: The following states have pay requirements that are: 1) changing¹⁰ on January 1, 2022, along with the amount the rate changes; and 2) will exceed the minimum amount employers must pay exempt executive, administrative, and professional employees under the federal Fair Labor Standards Act (FLSA).

Where Minimum Wage Applies to White Collar Employees: In various states, executive, administrative, or professional employees are exempt from state overtime requirements, but not exempt from state minimum wage requirements, so they must earn at least the applicable minimum wage for each hour worked in a workweek, and on January 1, 2022 the minimum wage in some of these states (statewide and/or locally) will increase: Arizona; Colorado; Illinois; Massachusetts; New Jersey; South Dakota; and Virginia. Additionally, in a handful of states, including Arizona, where state and local minimum wage rates will increase on January 1, 2022, outside sales employees are not exempt from state minimum wage requirements.

Computer Employees: In California, certain computer software employees are exempt from state overtime requirements if they receive in 2022 a minimum hourly rate of $50 (an increase of $2.52), a minimum monthly salary amount of $8,679.16 ($436.84), or a minimum annual salary amount of $104,149.81 ($5,242.11). In Colorado, employees in highly technical computer-related occupations must receive at least the lesser of the applicable salary noted above or hourly pay that in 2022 is at least $28.92 (35₵). In Washington State, exempt computer employees paid on an hourly basis must be paid $50.72 (an increase of $2.80 for employers with 51 or more employees, and $13.07 for employers with 50 or more employees).

Medical Employees: California law also provides that licensed physicians and surgeons are exempt from state overtime requirements if in 2022 they receive a minimum hourly rate of $91.07 ($4.58).

Commissioned Employees Overtime Exception: To qualify under the FLSA’s 7(i) overtime exception, the regular rate of pay for an employee of a retail or service establishment must exceed one-and-a-half times the federal minimum wage, and more than half the employee’s compensation for a representative period (not less than one month) must represent commissions on goods or services. In the following states with January 1, 2022 rate changes, the 7(i)-type exception requires – in part – an employee’s pay to either equal or exceed one-and-a-half times the state minimum wage: California; Colorado; Minnesota; New York (possibly); and Washington.