Minimum wages are set to increase in a record number of US states and municipalities in 2022. In several states, the increases are part of scheduled raises on the road to $15 per hour. Learn more about what to expect for the upcoming year and how it might impact our country’s current hiring shortage.

When exactly do the new minimum wage rises take effect?

The first minimum wage increase went live in New York state on December 31, but most took effect on the first of the new year. Be prepared for changes throughout 2022 though: Hourly minimum pay for all federal contract workers – including disabled workers – will hit $15 on January 30, thanks to an executive order from President Biden last April. Then starting in July, minimum wage raises will take effect in Connecticut (up $1 to $14) and Nevada and Oregon (up 75 cents to $9.50 and $13.50, respectively). And Floridian workers will see a $1 increase to $11 on September 30.

Where are the most significant raises?

Virginia saw the largest 2022 increase, with minimum wages up $1.50 to $11 per hour. California, a leader on workers’ rights, also tops the wages table, with a state-wide minimum of $15 per hour. (For employers with 25 employees or fewer, it’s $14 per hour.) Parts of New York state, including NYC, also implemented a $15 minimum wage (the state-wide minimum is $13.20; fast-food workers made at least $15 per hour since July last year, state-wide).

For the record, several cities have gone past the $15 mark already. Seattle has the highest city minimum wage ($17.27) for most employers ($17.53 in SeaTac, home to Seattle-Tacoma International Airport). It’s $15.87 in Denver, $15.55 in Flagstaff, Arizona, and $16.40 in Apple’s hometown of Cupertino, California. Washington DC’s minimum hourly rates will hit $16.10 this July.

What about tipped workers and other exemptions?

Exceptions to the federal minimum wage apply for workers with disabilities, workers under age 20, tipped workers, and student-learners. However, several states and municipalities are upping minimum wages for groups covered by federal exemptions.

At the same time, the federal government is eliminating the sub-minimum wage for tipped employees of federal contractors by 2024. In addition, as of January 30, the federal government is extending the $15 minimum wage to federal contract workers with disabilities. (Tens of thousands of disabled workers in the US earn below the minimum wage, with some paid as little as $3.34 per hour.)

Employers will have to navigate complexity to stay compliant with different hourly minimums for different workers, employer types, and locations.

We stay ahead.

Over a million workers in America still earn the federal minimum wage or less, yet inflation is at its highest level in nearly 40 years. And although many employers hiked pay to combat labor shortages (Target and Amazon have a $15-per-hour minimum rate; Walmart has $12), inflation-adjusted average hourly earnings still fell by 1.9% in November 2021.

In today’s market, it’s more important than ever to be smart about offering competitive wages. In our work with employers across the country, we consistently find that those with the most success in attracting and retaining talent are those who own the market in wage rates. Working with Adecco means working with experts experienced in navigating local markets. You also get access to invaluable resources like our cost of turnover calculator and optimized pay rate calculator.

Learn how Adecco helped a leading fashion brand optimize pay for 100% fill rates, a 44% rise in applications, and a 52% boost in the interview-to-hire ratio. And find out how we can help you improve retention, reduce absenteeism, enhance productivity, and boost workers’ health, morale, and effort.

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Minimum Wage Plans 

The federal minimum wage currently sits at $7.25 per hour – unchanged since 2009 despite the rapidly rising cost of living. As the nation begins to raise wages, states and even individual companies, including Adecco, are beginning to take matters into their own hands.

State Wage Increases 

The chart below indicates which states will increase their minimum wage rate in 2021 within their jurisdiction to edge closer to the impending $15 hourly proposal.

For the latest data, be sure to check out this minimum wage tracking tool from the Economic Policy Institute. 

How Companies Are Tackling Minimum Wage Increases 

Companies like Target have already raised their minimum wage to $15 per hour in July 2020, while others including Charter Communications currently have a minimum wage of $15 per hour and announced plans in April 2020 to raise their minimum wage to $20 per hour in 2022. Similarly, Facebook raised its minimum wage for contractors to $15 per hour in 2015. They also raised the minimum wage for contractors again in May 2019 to $20 per hour in the San Francisco Bay Area, New York City and Washington, D.C., and $18 per hour in Seattle. Adecco continues to monitor minimum wage requirements and recruit quality talent at competitive pay rates.

Effects on Americans 

According to the Economic Policy Institute, this increase would benefit a total of 33.5 million workers. To be more specific, the number of individuals that would see increased hourly wages include:  

• 30.1 million adults ages 20+
• 19.6 million full-time workers
• 19.5 million women
• 9.4 million parents
• 4.6 million single parents
• 6.2 million workers in poverty

Adecco’s Divisional Finance Director, Greg Ruby, describes how these changes will have significant impact within the hiring experience and positive effects on talent retention:

“A higher pay rate is more likely to influence the candidate to accept and start work. This decreases the time to fill, number of interviews, and turnover which leads to productivity increases on the customer side. This also keeps our customer’s workforce more intact. A higher pay rate keeps associates happy and working, and in turn, keeps their business more consistently performing.”

Greg Ruby

Adecco Divisional Finance Director

Adecco’s Approach 

Adecco is closely monitoring these changes to stay ahead of the wage updates and proactively guide our customers and associates on the latest changes. We are also constantly evaluating industry trends and competitive market rates to ensure that our associates wage needs are met. Our teams are also keeping a close eye on the further decisions regarding corporate tax rates as President-Elect Biden assumes office later this month.

Interested in following our updates? Be sure to check out our resources page for additional insights.  

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