As 2025 begins, significant updates to minimum wage rates and salary thresholds are being implemented across the United States. These changes reflect efforts to address inflation, the rising cost of living, and shifting economic conditions. Employers must stay informed to ensure compliance and effectively navigate the financial and operational impacts of these updates.
For more information on wage and hour laws or to address specific concerns, please contact our Associate Counsel, Susan Shu, at contact@consultils.com.
Federal Minimum Wage
The federal minimum wage has remained at $7.25 per hour since 2009. However, many states have taken independent action, raising their minimum wage rates above the federal baseline. This patchwork of state regulations underscores the importance of understanding local labor laws, particularly for businesses operating in multiple jurisdictions.
Comprehensive State-by-State Updates for 2025
States with Minimum Wages Above the Federal Rate
Below is a list of state minimum wage rates effective January 1, 2025, unless otherwise noted:
States with Minimum Wages Equal to the Federal Rate ($7.25 per hour)
Idaho
Indiana
Iowa
Kansas
Kentucky
North Carolina
North Dakota
Oklahoma
Pennsylvania
Texas
Utah
Wisconsin
States Without a State Minimum Wage or Below the Federal Rate
The following states either do not have a state-mandated minimum wage or have set their minimum wage below the federal standard. In these cases, the federal minimum wage of $7.25 per hour applies to employees covered by the Fair Labor Standards Act (FLSA):
Alabama
Georgia: $5.15 per hour
Louisiana
Mississippi
South Carolina
Tennessee
Wyoming: $5.15 per hour
Employees not covered by the FLSA may earn wages below the federal minimum in these states.
Salary Threshold Updates for Exempt Employees
Federal Context
Starting from January 1, 2025, the federal minimum salary threshold for exempt employees has increased to $1,128 per week, equivalent to $58,656 annually. This threshold applies in states that have not implemented their own higher salary requirements. Employers in these states are only required to meet the federal standard unless legislative updates are enacted.
State-Specific Salary Threshold Updates for 2025
Several states have implemented updated salary thresholds for exempt employees in 2025. These changes are effective January 1, 2025:
California:
$1,320 per week ($68,640 annually)
New York:
$1,237.50 per week ($64,350 annually) in New York City, Nassau, Suffolk, and Westchester Counties
$1,161.65 per week ($60,001.80 annually) for the rest of the state
Washington:
$1,332.80 per week ($69,305.60 annually) for employers with 50 or fewer employees
$1,499.40 per week ($77,168.80 annually) for employers with more than 50 employees
Compliance Tips for Employers
Review and Update Payroll: Ensure your payroll systems and employment policies are updated to reflect the latest state regulations. Multi-state employers must track varying requirements across jurisdictions.
Adjust Budgets: Increased labor costs may require a reevaluation of your company’s budget and pricing strategies. Early planning can help mitigate financial strain.
Communicate with Employees: Transparency is key. Inform your workforce about changes to wages and classifications to maintain trust and compliance.
Monitor for Federal Updates: While the federal minimum wage remains unchanged, legislative efforts could result in future increases. Stay informed to anticipate potential impacts.
Why It Matters
For employers, non-compliance with wage laws can result in significant penalties, lawsuits, and reputational damage. Understanding these changes is not just about avoiding legal risks but also about fostering a workplace that values fair compensation and employee well-being.
For personalized advice or assistance with compliance, reach out to our team at contact@consultils.com.
Disclaimer: The materials provided on this website are for general informational purposes only and do not, and are not intended to, constitute legal advice. You should not act or refrain from acting based on any information provided here. Please consult with your own legal counsel regarding your specific situation and legal questions.
Susan Shu is an Associate specializing in transaction and compliance at ILS.
With years of experience advising multinational clients, Susan focuses on mergers and acquisitions, inbound and outbound investments, and general corporate matters. She has extensive experience structuring complex transactions, including establishing a VIE framework for international investors in Chinese internet companies. Additionally, she has guided international investors through private equity and venture capital transactions, drafting detailed due diligence reports and transaction documents.
Email: contact@consultils.com | Phone: 626-344-8949