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Price index increase lifts Missouri’s minimum wage to $12.30 an hour

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(The Center Square) – A voter-approved Missouri minimum wage law means the state’s hourly rate is $12.30, an increase of 30 cents, starting on Monday.

More than 62% of voters approved Proposition B in 2018 to gradually increase the state’s minimum wage from $7.85 an hour to $12 by 2023. The law requires the minimum wage to increase or decrease each year depending on changes in the cost of living found in the Consumer Price Index for urban wage earners and clerical workers. The rate is taken from a July-to-July comparison and rounded to the nearest five cents. The July 2023 rate was 2.6% or 31 cents per hour.

Missouri law doesn’t allow the state’s minimum wage to be lower than the federal minimum wage rate, which is set by the U.S. Department of Labor at $7.25 an hour for 2023.

All private businesses in the state are required to pay the new hourly rate of $12.30 with an exception for retail and service businesses with gross annual sales less than $500,000. The state’s minimum wage law doesn’t apply to public employers.

Compensation for tipped employees must also total at least $12.30 per hour, according to information from the Missouri Department of Labor and Industrial Relations.

“Employers are required to pay tipped employees at least 50 percent of the minimum wage, plus any amount necessary to bring the employee’s total compensation to a minimum of $12.30 per hour,” the department stated in a media release.

Cindy Adams, executive director for Missouri Jobs with Justice, said her organization will work for a substantial increase in the minimum wage and for earned paid sick leave through a ballot initiative in 2024. The organization highlighted the Massachusetts Institute of Technology’s Living Wage Calculator showing a Missouri family of four with both parents working would require jobs paying $22.89 per hour for a living wage.

“We know that Missouri workers are what drive economic growth in our state – it’s our labor, skills, spending, and contributions that build our collective success,” Adams said in a statement. “But some businesses still take advantage of working people, and this increase does not do enough to protect workers from exploitation.”

Prior to 2017, local governments could set minimum wages higher than the statewide minimum wage. House Bill 1194, sent to the secretary of state in July 2017 as Republican Gov. Eric Greitens didn’t sign the legislation, prohibits local governments from enforcing a minimum wage, a living wage or employment benefits exceeding state law, rules or regulations.

The legislation nullified all existing local government laws establishing or enforcing a minimum wage. In 2015, the city of St. Louis passed an ordinance increasing the city’s minimum wage until it reached $11 per hour in 2018. In 2017, Kansas City voters approved increasing the minimum wage until it reached $15 in 2022, but the Missouri law nullified the initiative.

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