Missouri’s Minimum Wage Increases January 1, 2021

By Jo McClure, CPP on Dec 22, 2020
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traffic sign stating minimum wage inrease ahead

The federal minimum wage was set at $7.25 in 2009 and has not increased since. A nationwide “Fight for $15” movement, which advocates for the minimum wage to be raised to $15 per hour nationwide, began in 2012. Although the movement thus far has not succeeded in getting the national minimum wage rate changed, the fact that President-elect Joe Biden has voiced support may mean the issue will come to the forefront of national discussions in the months ahead.

Either way, some states and cities have increased rates on their own. Among those is Missouri, where the minimum wage, $9.45 per hour in 2020, will increase to $10.30 per hour on January 1, 2021. Tipped employees in Missouri must be paid half of the state minimum wage rate.

Missouri began inching its minimum wage upward after voters passed Proposition B in 2018. The law, which took effect January 1, 2019, raised the minimum wage to $8.60 per hour and mandated an additional $.085 per hour increase each year until 2023, when the rate will hit $12.

Kansas’ minimum wage matches the national rate, at $7.25. The state has not announced any changes in 2021.

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Types of minimum wage

There are two types of minimum wage increases: planned and indexed. With planned increases, employers can get a general idea of what employee wage costs will be several years in advance. Missouri’s minimum wage increases, for example, fall into the “planned” category through 2023.

Before Proposition B, Missouri’s minimum wage went up each year based on indexing. The state’s minimum wage will return to indexing after 2023, increasing annually according to the Consumer Price Index.

Retail and service business exemptions

While most Missouri employers will be expected to comply with the 2021 minimum wage law by raising employee pay to $10.30 per hour, there are exceptions. Retail or service businesses with annual gross income of less than $500,000, for example, are not subject to the state’s minimum wage requirement. According to the Missouri Department of Labor, such companies have freedom to make their own choices about how much they pay employees.

However, if your business falls in one of these categories, it’s wise to double-check your requirements by contacting Axcet HR Solutions. 

For more information on how Axcet HR Solutions makes managing payroll easier, visit our website.

Written by Jo McClure, CPP

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