A minimum wage of $13.75 per hour took effect on January 1, 2025 in Missouri.
On November 5, 2024, Missouri voters approved Proposition A, amending Chapter 290 of the Revised Statutes of Missouri to provide changes to the state’s minimum wage.
Additionally, a minimum wage of $15.00 per hour will take effect on January 1, 2026. Thereafter, all future annual adjustments to the minimum wage will be based on the Consumer Price Index.
Missouri’s minimum wage has increased from $7.65 in 2015 to $12.30 in 2024, with adjustments based on the Consumer Price Index (this minimum wage was set as a result of Proposition B, approved by voters in 2018, and would have increased the minimum wage to $12.65 in 2025).
Rick Renno, owner of the Oar House restaurant, reported that the new minimum wage does affect the bottom line for his business.
“My cooks and maintenance staff receive $15 an hour; however, the wait staff and bartenders’ salaries are adjusted according to tips,” said Renno. “So, 2/3 of the staff are on adjusted salaries.”
Renno said that while business continues to be good, people are more careful about eating out.
“On Friday and Saturday night, we have good crowds. But instead of ordering prime rib, our customers might order a cheeseburger and instead of three drinks they might only order one,” said Renno. “However, I still have the same bills to pay whether they buy the prime rib or the cheeseburger.”
Wait staff at restaurants are dependent on tips since they are not making minimum wage.
According to Renno, a standard tip is considered 20% of the bill.
“I asked my staff if they wanted me to just add the tip to the bill for large groups, but they all wanted to let the customer decide on the tip,” said Renno.
Hawthorn Bank president Chuck Allcorn said that the new law doesn’t really affect his bank since his employees are all above minimum wage, however, he said it will hurt some businesses.
“While all employees deserve a living wage, the hike in the minimum wage cuts into the bottom line and makes it difficult for businesses, especially restaurants to make it,” said Allcorn.
According to the Massachusetts Institute of Technology’s Living Wage Calculator, single people without children bringing in $16.29 an hour are making a livable wage in Missouri. The tool suggests that each parent in a family makes $25.14 an hour to live comfortably.
Beth Drake at Osage Mini-Mart said that all her employees make $15 per hour.
“Prices in the store have to go up to cover the cost of my employees, but most of them were already making $15 an hour before the law went into effect,” said Drake. Osage Mini-Mart has 8 employees.
Five states have not adopted a state minimum wage: Alabama, Louisiana, Mississippi, South Carolina and Tennessee. Three states; Georgia, Oklahoma and Wyoming have a minimum wage below $7.25 per hour. In all eight of theses states, the federal minimum wage of $7.25 per hour generally applies.
Retail or service businesses with an annual gross income of less than $500,000 can pay employees less than the Missouri minimum wage. Employers can pay certain full-time students working part-time less than the Missouri minimum wage, as long as the wage is at least 85% of the minimum.
Passage of Proposition A also entitles employees to Paid Leave under this law. More specifically, employees of private employers with 15 or more employees will accrue one hour of Paid Leave for every 30 hours worked, with a usage cap of 56 hours per year (unless the employer opts for a higher limit). For employees of private employers with 14 or fewer employees, the accrual rate will be the same, but the usage cap is set at 40 hours annually (again, subject to an employer’s choice to implement a higher limit). For the purposes of accrual, salaried FLSA-exempt employees are assumed to work 40 hours per week, unless their actual work week is fewer than 40 hours. If an employee works 40 hours per week, 50 weeks out of the year (assuming 2 weeks of vacation), they will accrue approximately 68 hours of Paid Leave in a 12-month period. Though there is no formal accrual cap, this has little practical effect for unused Paid Leave in excess of 80 hours, in light of the use and carryover caps imposed. Employers should still, however, maintain accurate accounting of Paid Leave hours employees accrue in excess of the usage and carryover caps.