As of January 1st, 23 states and Washington, D.C. implemented minimum wage increases, with three additional U.S. states poised to follow with increases in 2023.
The states included our very own: New Jersey’s statewide minimum wage increased by $1.13 to $14.13 per hour for most employees as of Sunday.
How is Minimum Wage is Determined
Under the Fair Labor Standards Act (FLSA), the federal minimum wage for covered nonexempt employees is $7.25 per hour, which was put into effect in July 2009.
However, many states and cities can put their own minimum wage rates in place through legislation. Where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher minimum wage.
Washington, D.C., and 13 states tie their minimum wages to the consumer price index, a government measure for the average change consumers pay for certain goods and services, which increased in 2022.
Related: When Will We Hit Peak Inflation?
But that’s not the only driving force.
President Joe Biden signed an executive order in 2022 to raise the federal minimum wage to $15 per hour for federal workers and contractors, and has campaigned for changes for all workers.
But a broader change to the nationally recognized minimum wage must be done through Congress, and efforts to do so have failed to make it into legislation.
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