As we move through 2025, new minimum wage increases and evolving salary thresholds are changing the payroll landscape across the U.S. Employers need to stay ahead of these updates to remain compliant and avoid costly penalties.
This guide outlines key federal, state, and local changes impacting payroll teams and HR professionals nationwide.
Statewide Minimum Wage Increases Effective Jan. 1, 2025
On January 1, 2025, minimum wage increases took effect in numerous states, including:
Alaska, Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Michigan, Minnesota, Missouri, Montana, Nebraska, New Jersey, New York, Ohio, Rhode Island, South Dakota, Vermont, Virginia, and Washington.
Some of these increases are part of automatic inflation-based adjustments, while others are tied to legislation or ballot measures approved in 2024.
Highlights from Key State Updates
Alaska
- Minimum wage increased to $11.91 on Jan. 1
- Will rise again to $13.00 on July 1, per a 2024 ballot measure
Florida
- Minimum wage will increase to $14.00 effective September 30
Michigan
- Rose to $10.56 on Jan. 1
- Will increase again to $12.48 on Feb. 21 per Supreme Court ruling
- Tipped wage will rise from $4.01 to $5.99
Missouri
- Increased to $13.75 for 2025
- Tipped minimum: $6.875
Minnesota
- Eliminated two-tier wage system
- Single statewide wage set at $11.13/hour for most employers
- Workers under age 20 can be paid $9.08/hour for their first 90 days
Oregon
- Subject to annual inflation-based changes
- 3-tier system continues: Portland metro, nonurban, and statewide rates
Virginia
- Increased to $12.41
- First time, the minimum wage is adjusted based on inflation
District of Columbia
- Increased to $18.00/hour on July 1
- Tipped minimum wage rose to $12.00
Local Minimum Wage Highlights
Boulder, Colorado
- Created its own minimum wage effective Jan. 1
- Set at $15.57/hour with tip credit rules for service workers
Cook County, Illinois
- Local rates align with statewide: $15.00 (non-tipped), $9.00 (tipped)
- Will adjust again on July 1 if state rates rise
Johnson County, Iowa
- Recommended (not enforceable) minimum wage is $12.64
Portland, Maine
- Emergency wage provision now limited to declared emergencies only
Washington Localities
- Burien: $21.16 (500+ employees), $20.16 (21-499 employees)
- Everett: $20.24 (large employers), $18.24 (others)
- Bellingham: $17.66 increased to $18.66 on May 1
Salary Thresholds for Overtime Exemption
In April 2024, the U.S. Department of Labor issued final rules raising the salary thresholds for executive, administrative, and professional (EAP) exemption. Key numbers for 2025 include:
- Standard threshold: $1,128/week or $58,686/year
- Highly compensated employees: $151,164/year
These thresholds are the federal standard, but several states set higher limits:
Alaska
- Minimum exempt salary = 2x minimum wage = $952.80/week, $49,546/year
California
- Exempt salary = 2x $16.50 = $1,320/week, $68,640/year
- Special thresholds for:
- Licensed surgeons: $103.75/hour
- Computer professionals: $56.97/hour
- Educators: $148.51/day
Colorado
- Indexed annually
- 2025 exempt threshold: $1,086.25/week, $56,485/year
- Highly compensated: $127,091/year
- Highly technical employees: $34.07/hour
Maine
- Minimum salary = 3,000x minimum wage = $845.21/week, $43,951/year
New York
- 2025 exempt salary:
- NYC/Long Island/Westchester: $1,237.50/week
- Rest of state: $1,162.50/week
Washington
- 2025 exempt salary:
- Employers with ≤50 employees: $1,332.80/week
- Employers with 51+: $1,499.40/week, $77,968.80/year
- Computer professionals: $58.31/hour
What Employers Should Do Next
- Review employee wages to ensure compliance by location
- Update payroll systems to reflect local and federal changes
- Reassess employee exemption status under new salary thresholds
- Communicate changes to employees in advance
Need help adjusting your filings or navigating changes? Aatrix makes compliance easy with guaranteed, accurate, and on-time eFiling.
