During the November 2022 elections, voters in several locations across the country approved minimum wage increases. Most notably:

• District of Columbia voters passed the Tip Credit Elimination Act, which, by 2027, will result in the elimination of the tip credit in the District and require employers to pay tipped employees the full minimum wage.

• Voters in Nebraska approved an incremental increase in the Cornhusker State’s minimum wage, which will reach $15 per hour in January 2026.

• Nevada voters similarly passed an initiative to add a minimum wage provision to the state constitution, under which the minimum wage will increase from $10.50 to $12.00 effective July 1, 2024.

More details about these developments may be found in our article, Employers Should Note Post-Midterms State Law Changes.

Employers will need to monitor the effective dates of these increases, to implement systems that will ensure compliance, particularly where multiple adjustments are needed to account for changes that will be incremental over a period of several years, and also should verify that they are properly calculating tipped employee wages and overtime based on the new wage rates. This is especially important when providing any additional compensation or incentives, such as shift differentials, that must be included in the regular rate of pay for overtime purposes. Additionally, these measures may require employers to reevaluate their overall compensation structure, to determine how changes at the lower end of the pay scale affect pay equity in the organization.