Minimum Wage Is Going Up: A Checklist for Your Business

If you employ even one hourly worker, you’re responsible for meeting the new state minimum wage, as well as posting the correct notices in your workplace. The Department of Labor has already announced federal and state-level updates for many regions, and penalties for noncompliance can be steep. The good news: with a few straightforward steps, your business can stay compliant and confident heading into the new year.

What’s Changing and Why It Matters

In 2025, more than half of U.S. states raised their minimum wage, either through pre-scheduled increases or inflation indexing. Some local governments are also setting their own rates, which may be higher than state or federal requirements.

These increases are meant to help wages keep pace with the cost of living, but they can also create new challenges for small business owners, including:

• Reassessing budgets, pricing, or hiring plans.
• Adjusting payroll systems and timesheets.
• Avoiding wage compression (when higher-paid roles get too close to the new minimum).

Even if you already pay above minimum wage, you may need to update required workplace posters or audit your payroll system for compliance.

A Quick Minimum Wage Increase Checklist

Here are the top steps you should take when your state’s minimum wage changes:

1. Confirm the New Rate and Effective Date
   Check your state’s labor department website for the official 2025 rate and the date it takes effect (some states change mid-year).

2. Update Your Payroll System
   Adjust hourly wages and overtime calculations accordingly. Most payroll software allows you to schedule changes in advance.

3. Review and Replace Labor Posters
   Federal and state law requires that wage and labor posters are up-to-date and clearly visible. Get updated posters from your state agency or a trusted compliance provider.

4. Review Your Budget and Pricing
   A higher wage may impact your margins. Reassess your pricing, staffing levels, or service offerings to absorb the change without sacrificing quality.

5. Communicate with Your Team
   Let employees know about any changes to their pay or schedules. A simple heads-up builds trust and avoids confusion.

Questions to Ask About Minimum Wage Compliance

Before you lock in changes, take a few minutes to ask these key questions:

• What is the new minimum wage in my state (or city), and when does it take effect? Could any of my workers fall below the new rate?
• Is my payroll system ready to apply the new wage automatically? Will overtime, paid leave, and benefits calculations also update correctly?
• Where can I find and display the most recent labor law posters? Are they required to be printed, or can I post them digitally?
• How will this wage increase affect my overall labor costs? Should I revisit my budget or pricing structure in response?

What You Can Do Next

To stay ahead of the change, take a few practical next steps:

• Visit your state labor department’s website to confirm the latest minimum wage rate and requirements, as well as for finding the latest required labor posters.
• Update your payroll software or provider with the new rates and effective date.
• Review your budget projections and prepare for the impact of higher payroll costs.
• Talk to a Legal Pro about minimum wage requirements in your area and how to stay compliant.

Planning ahead now can save you from rushed updates or penalties later, and help you keep your team informed and confident.