New Mexico Minimum Wage Update
Based upon the Federal government’s stagnant minimum wage (it’s been $7.25/hour for a decade, people), many states have elected to legislate their own increases. New Mexico is one of those states. However, until recently, it maintained its $7.50/hour minimum wage for almost a decade as well.
On April 1st, Governor Lujan Grisham signed Senate Bill 437, invoking a four-part graduated minimum wage increase that takes the New Mexico state minimum wage up to $12/hour by 2023. No, this was not an elaborate April Fools’ joke, however trying to figure out how it applies to your business might be pretty comical. First, let’s start with the basics of the new law:
- From now until December 31st, there is no change. The state minimum wage remains $7.50/hour ($2.13/hour for tipped* employees).
- January 1st, 2020: State minimum wage bumps up to $9.00/hour ($2.35/hour for tipped employees).
- January 1st, 2021: State minimum wage jumps to $10.50/hour ($2.55/hour for tipped employees).
- January 1st, 2022: State minimum wage increases to $11.50/hour ($2.80/hour for tipped employees).
- January 1st, 2023: State minimum wage lands at $12.00/hour ($3.00/hour for tipped employees).
Seems simple enough, right? Not necessarily. Depending on where your business is located, these changes may have little or no effect on you at all. Here’s what I hope is a helpful table (I love a good table):
|Year||NM State Minimum Wage||Albuquerque Minimum Wage||Las Cruces Minimum Wage||Santa Fe Minimum Wage||Bernalillo County||Santa Fe County|
|2019||$7.50 ($2.13 tipped)||$9.20 ($5.50 tipped)||$10.10 ($4.04 tipped)||$11.80 ($2.13 tipped)||$9.05 ($2.13 tipped)||$11.80 ($3.53 tipped)|
|2020||$9.00 ($2.35 tipped)||Increase posted by October 15th, 2019||Increase posted by October 15th, 2019||Increases annually based upon CPI||Increase posted by October 15th, 2019||Increases annually based upon CPI|
|2021||$10.50 ($2.55 tipped)||Increase posted by October 15th, 2020||Increase posted by October 15th, 2020||Increases annually based upon CPI||Increase posted by October 15th, 2020||Increases annually based upon CPI|
|2022||$11.50 ($2.80 tipped)||Increase posted by October 15th, 2021||Increase posted by October 15th, 2021||Increases annually based upon CPI||Increase posted by October 15th, 2021||Increases annually based upon CPI|
|2023||$12.00 ($3.00 tipped)||Increase posted by October 15th, 2022||Increase posted by October 15th, 2022||Increases annually based upon CPI||Increase posted by October 15th, 2022||Increases annually based upon CPI|
So what does this mean? Well, if your business is located in Santa Fe proper or Santa Fe County, your minimum wage is already exceeding the hourly rate of Ms. Lujan Grisham’s increase through 2022, and will likely continue to do so with annual increases, making the new law have zero impact on your business.
If you are in Albuquerque or Las Cruces, chances are that your local minimum wage will also stay ahead of the new law. Bernalillo County businesses might need to pay closer attention when the larger jump in the new law occurs (from 2020-2021) because the state rate may exceed your local minimum and will then control. This is a good time to mention that you can always legislate ABOVE the state or federal minimum wage, but you cannot ever legislate below it. The higher applicable rate will prevail.
As you can see, this smattering of different minimum wage regulations across the state does make it challenging to remain compliant, particularly if you have multiple locations throughout New Mexico. It really makes you respect the employers who had the $$$ to throw in the towel on all of this and create their own minimum wage (I’m lookin’ at you, Target, with your sassy little $13/hour, heading to $15/hour by 2021, and also Bank of America with your scandalous $17/hour beginning May 1st).
At Human Resources Experience, we want to make compliance with employment law as easy as possible. Questions about which employment laws apply to your business? Call us to set up a consultation today.
*Remember that tipped employees must still meet the hourly minimum wage requirement once their tips are added to their hourly rate. If they do not receive enough tips to reach the applicable minimum wage, the employer must pay the difference.