Wages are going up in 2023. Here’s a quick update on those lucky citizens getting a pay bump this year and other good news for hospitality workers!
It’s officially a new year. A fantastic time for reflection, goal setting, and making money moves. For some, the latter just got a little easier as 23 states and Washington, D.C., are increasing minimum wages.
But that’s not the only good news coming in 2023.
Washington, D.C. is ditching the tip credit, and Oregon passed important Paid Leave legislation that serves as a much-needed safety net for everyone (especially hospitality folk).
Here’s a quick overview of the bright things coming this 2023.
Increasing Minimum Wages
While the federal minimum wage remains at $7.25/hr—many states and local municipalities have increased wages (well beyond the federal government) for the betterment of their residents and to combat rising living costs.
On January 1st, 23 states, Washington, D.C., and 27 other individual cities and counties raised minimum wages. Additionally, Connecticut, Nevada, Oregon, and Florida, have scheduled increases coming later this year.
Nebraska saw the most significant increase due to initiative 433, passed in November. This legislation raises the minimum wage by $1.50 each year, intending to reach a $15 minimum by 2026. The new year marked the first installment, bringing Nebraska’s minimum wage to $10.50.
Washington State comes in close to Nebraska, raising wages by $1.25, bringing their minimum wage up to $15.74/hr.
Michigan saw the smallest increase at $0.23, bringing their minimum wage to $10.10 an hour for non-tipped employees. According to NPR, there is a second opportunity to increase minimum wages to $13.03 in February.
Minimum wage increases are essential, especially with the rising cost of living. Unfortunately, things can differ depending on if you receive tips. If you earn tips, please check in with your local government to find accurate wage information.
Washington, D.C.’s Initiative 82
2023 marks the beginning of Initiative 82, a plan to phase out the tipped minimum wage by 2027 in Washington, D.C.
Last November, voters overwhelmingly supported the initiative, ending the tip credit. Before passing Initiative 82, employers could pay tip earners a minimum wage of $5.35 an hour, so long as tips brought their wages up to the total $16.10 an hour minimum wage.
The effort will increase tipped workers’ wages by a dollar or two each year to reach the full minimum wage by 2027.
While there was strong support for initiative 82, there is still a lot of uncertainty among restaurant folk around jobs, menu price, service fees, and sudden closures.
Things might be rocky initially, but as someone who has worked in a state where tip earners receive the full minimum wage—we not only made it work but thrived.
If anything, focusing on the benefits this new initiative will have on workers’ livelihood is critical.
Paid Leave Oregon
This one isn’t about wage increases but is a crucial effort worth mentioning and will be an extremely valuable resource to Oregon’s hospitality population.
Paid Leave Oregon, a new payroll tax, went into effect on January 1, 2023. By September, this program will allow qualifying workers to claim benefits for paid time off when experiencing major life events, illness, and injury.
Anyone who works in Oregon who earned at least $1,000 the year before applying for benefits, and is experiencing a qualifying major life event can claim benefits based on how much they earn. According to Oregon.Gov many claimants could receive 100% of their wages.
Since this is a payroll tax, the program is funded by contributing 1% of wages, with 40% of that 1% paid by employers and the remaining 60% from employees’ earnings.
Paid Leave Oregon is groundbreaking for hospitality workers in the state. A significant issue in our industry is the lack of resources and support for workers when illness, injury, or life events like pregnancy occur.
Many people work through situations they really shouldn’t, only because they can’t afford not to. Now workers can gain peace of mind that there is a safety net when facing life events.
The New Year is bringing many welcome changes! Things aren’t perfect, but we’re seemingly off to a good start.