By Danny Klein
FSR Magazine, December 31, 2024
The restaurant industry is no stranger to having a crisis on its plate. That’s the nature of day-to-day, in-the-trenches hospitality and navigating macro battles for the country’s second-largest employer. But 2024 had a unique tilt that felt like the apex of years of post-COVID reactions. ... In plainer terms, restaurants grappled with hiking food and labor and the need to satisfy customers who had grown weary of price hikes. ...
The company [Restaurant365] tapped data from more than 6,200 restaurant and café locations ahead of the calendar turn. ...
Speaking of minimum wage, though, 21 states will raise the floor on New Year’s Day. Two others, and the District of Columbia, have increases slated for later in 2025. The federal minimum wage has been $7.25 an hour since July 24, 2009.
With voters in Missouri and Alaska approving ballot measures, 15 states plus D.C. have a minimum wage of $15 or higher now or are phasing in scheduled increases to $15 or higher, according to Business For a Fair Minimum Wage: Alaska, California, Connecticut, Delaware, Florida, Hawaii, Illinois, Maryland, Massachusetts, Missouri, Nebraska, New Jersey, New York, Rhode Island and Washington State. Washington has the highest state minimum wage at $16.66 as of January 1, 2025.
Here’s a look at the scheduled increases [from Business for a Fair Minimum Wage]:
- Alaska increases to $11.91 on January 1, 2025, and then, in accordance with Ballot Measure 1, it increases again to $13 on July 1, 2025. It increases to $14 on July 1, 2026, $15 on July 1, 2027, followed by annual indexing resuming January 1, 2028.
- Delaware increases to $15 on January 1, 2025.
- Illinois increases to $15 on January 1, 2025.
- Michigan increases to $10.56 on January 1, 2025, and then to $12.48 on February 21, 2025 in accordance with a 2024 ruling by the Michigan Supreme Court. The minimum wage is scheduled to increase to $13.29 on February 21, 2026, $14.16 in 2027 and $14.97 in 2028, followed by annual indexing.
- Missouri, with the passage of Proposition A, increases to $13.75 on January 1, 2025, $15 in 2026, and then is indexed annually.
- Nebraska increases to $13.50 in 2025 and $15 in 2026 and then is indexed annually.
- New York increases on January 1, 2025, to $16.50 in New York City, Westchester County and Long Island and $15.50 in the rest of the state, followed by 50-cent increases in 2026 to $17 and $16 respectively. Indexing begins in 2027.
- Rhode Island increases to $15 on January 11, 2025.
States with indexing where annual increases (based on the Consumer Price Index unless indicated otherwise) take effect January 11, 2025, include:
- Alaska increases to $11.91 on January 11, 2025. See above for rate increases beginning July 2025 in accordance with Proposition A
- Arizona increases to $14.70
- California increases to $16.50
- Colorado increases to $14.81
- Connecticut increases to $16.35 (CT is indexed to the Employment Cost Index)
- Maine increases to $14.65
- Minnesota increases to $11.13
- Montana increases to $10.55
- New Jersey increases to $15.49
- Ohio increases to $10.70
- South Dakota increases to $11.50
- Vermont increases to $14.01
- Virginia increases to $12.41
- Washington state increases to $16.66
State increases later in 2025:
Oregon and the District of Columbia will have cost of living increases on July 1, 2025. As noted above, Alaska has a second 2025 increase on July 1.
Florida’s minimum wage will increase to $14 on September 30, 2025, and then to $15 in 2026; in 2027, Florida will resume annual indexing. ...
Restaurant365 suggested operators deploy a few strategies to deal with labor hikes. ... Using tech to automate scheduling and payroll can save time and reduce errors and let managers focus on what’s vital (whatever that might be to each operation). Additionally, Restaurant365 said offering performance-based bonuses could encourage staff and leaders to work harder and stay motivated. “Lastly, fostering a positive work culture and providing opportunities for growth helps keep employees happy and loyal, reducing turnover and the runaway costs of recruiting, hiring, and training new people,” the company said. ...