As we look forward to the New Year, employers in all Member states should be aware of applicable minimum wage increases, as well as the final phase-in of California agriculture overtime provisions.  

Unless an exemption applies, most employers are subject to both state and federal minimum wage laws. However, local city and county minimum wage ordinances may require an employer to pay a higher minimum wage for employees working within their local jurisdiction. As such, employers should keep this rule in mind: When faced with conflicting employment law standards, an employer must follow the standard that is most beneficial to the employee. 

Arizona 

Effective January 1, 2025, Arizona’s minimum wage will increase to $14.70 per hour. Generally, unless an exemption applies, an employer may not pay less than the minimum wage for all hours worked, regardless of the frequency or basis of payment (e.g., hourly, salaried, commissioned, piece rate, or any other basis). This increase is in accordance with the state’s Fair Wages and Healthy Families Act which requires Arizona’s minimum wage to increase yearly based on the cost of living. Cities in Arizona are also empowered to establish local minimum wage rates. However, only Tucson ($15.00 per hour for 2025) and Flagstaff ($17.85 per hour for 2025) have established their own minimum wage rates. 

The Fair Wages and Healthy Families Act and 2025 increase does not apply in certain circumstances such as where an individual is employed by a parent or a sibling; or to individuals employed in a small business that grosses less than $500,000 in annual revenue, if that small business is exempt from having to pay a minimum wage under section 206(a) of Title 29 of the United States Code. 

Wage rate posters must be displayed prominently in a place accessible to employees. Updated wage and hour notice posters (Spanish and English) can be found on the Industrial Commission’s Labor website.  

California 

Effective January 1, 2025, California’s minimum wage will increase to $16.50 per hour. Unless an exemption or higher minimum wage applies, all employers must pay employees the state minimum wage. California has several local city and county minimum wage requirements. Review the UC Berkeley Labor Center’s detailed list of local minimum wage ordinances for additional guidance.  

January 1, 2025, also marks the state’s final phase-in of agricultural overtime provisions. In 2016 California initiated a plan to phase-in agricultural overtime to the same basis used in most other California industries. The multi-year phase-in schedule ends in 2025 for employers with 25 or fewer employees.  

As of January 1, 2025, employers with 25 or fewer employees must pay overtime of 1.5 times the employees’ regular rate of pay for any hours worked over 8 hours per day or 40 hours per week. Double the regular rate of pay is required after 12 hours in a workday. This is the last phase-in for all employers. Updated wage and hour notice posters (Spanish and English) can be found on the Department of Labor Standards and Enforcement website. 

Colorado 

Effective January 1, 2025, Colorado’s state minimum wage will increase to $14.81 per hour. Cities in Colorado are empowered to establish local minimum wage rates. Several cities including Denver and the City of Boulder have established their own minimum wage rates. Review the Colorado Division of Labor Standards and Statistics website for a list of local minimum wage ordinances.  

Also, effective January 1, 2025, overtime must be paid after 48 hours worked per week, or 56 hours worked per week for up to 22 “peak weeks” for highly seasonal employers. 

Employers covered by COMPS Order #37 are required to post the applicable wage and hour notice poster. An updated poster can be found on the Department of Labor and Employment’s website.   

New Mexico 

New Mexico’s state minimum wage will not increase in 2025. The state’s last increase was effective January 1, 2023, at $12.00 per hour. Generally, unless an exemption applies, an employer may not pay less than the minimum wage for all hours worked. New Mexico has several local city and county minimum wage requirements.i Review the Department of Workforce Solutions website for a detailed list of local minimum wage ordinances. Employers in the state must also display wage and hour notice posters. Updated posters can be found on the Department’s website.  

Members with questions about pending minimum wage increases should contact Western Growers.