Minimum wages are set to increase on July 1, 2025, in cities and states across the country.
Now is the time to get ahead. This guide outlines what to know, what to update, and how to stay compliant while keeping operations running smoothly.
Where Wages Are Going Up This Summer
Several jurisdictions are raising their minimum wage on July 1. Make sure you’re reviewing rates based on where your employees work, not just where your business headquarters is located. The following cities and/or states have confirmed wage increases this summer. Use the links below to check the latest rates and requirements:
Wage Resource Links:
Even if your city or state isn’t listed here, wage increases are often quietly implemented at the city or county level. The federal minimum wage sets the baseline, but state or local laws typically apply if they’re higher. Always verify wage requirements through your local or state labor department or consult your labor attorney to ensure you’re fully compliant.
Manage Wage Rules Across Cities and Counties
Wage rates are governed by where the work is performed, not where your business is headquartered.
That means delivery zones, shared kitchens, and even nearby counties may fall under different rules.
To reduce risk and ensure compliance, follow these steps — and remember to regularly review and update this information as your operations or local laws change:
- Identify every location where work is performed.
Include all storefronts, ghost kitchens, shared kitchens, delivery areas, and event sites. If operations cross city or county lines, treat each as a separate jurisdiction for wage compliance.
- Assign employees to each location.
Use scheduling software or a shared tracker to map where each employee regularly works. If team members rotate between locations, list all applicable jurisdictions. Be sure to review and update this information on an ongoing basis.
- Research the current wage rates for each location.
Use your updated location list to verify the applicable minimum wage. Confirm base pay, tipped wage rules, and any hospitality-specific requirements through your state or local Department of Labor. If in doubt, consult your labor attorney to ensure accuracy. Wage rules can change frequently, so it’s critical to double-check all details through trusted sources.
Update Payroll and Timekeeping Systems
Once you’ve identified where your employees work, the next step is to ensure that your payroll, scheduling, and POS systems accurately reflect the correct wage rates for each location. Wage compliance issues often stem from outdated rate tables, incorrect assignments, or unadjusted overrides, so it’s essential to review these systems carefully.
Start by reviewing all systems where wage rates are stored or applied, including:
- Payroll and HR platforms
- Scheduling software
- POS systems and time clocks
Verify that each platform reflects the correct minimum wage for every location where work is performed. If your system allows it, enable location-based wage rules.
If employees work in multiple locations, confirm how your system handles wage rate assignments. Some platforms can automatically apply the correct minimum wage based on where the work is performed. Others may not support location-based rates or may require manual adjustments to stay compliant. Ensure you understand how your specific payroll, scheduling, and POS systems manage this process.
Run a test payroll before July 1 or audit a recent cycle to confirm accuracy. It’s better to catch and correct issues now than to risk a wage claim later.
Adjust Tip Pooling and Tipped Wage Policies
Minimum wage increases can impact how you handle tips, especially if your state allows tipped wages or tip credits. In some areas, employers are permitted to pay a lower base wage as long as the employee’s wages plus tips equal or exceed what they would have earned at the full minimum wage rate. In other areas, like California, employers must pay the full minimum wage before tips are added.
If you use a tip pool, review who is included, how tips are tracked, and whether everyone in the pool is still eligible under local law. Employees working across different cities may also be subject to multiple wage rules, which means your tip distribution model may need to be adjusted to stay compliant.
Once updates are made, clearly document the new policy, add it to your onboarding materials, and explain the changes to your staff. This keeps everyone aligned and helps prevent misunderstandings.
Update Wage Notices and Pay Documentation
Several states, including California, require you to issue updated wage documentation when base pay changes. This includes Wage Theft Prevention Notices, onboarding forms, and handbooks.
Review all compensation materials to ensure they reflect the correct rates and classifications. This includes:
- Offer letters and hiring packets
- Required wage notices by state
- Any documentation outlining pay structure or tip policies
Clear documentation demonstrates an intent to comply and helps resolve issues promptly in the event of a wage claim.
Audit Paystubs and Exempt Status for Compliance
Use July 1 as an opportunity to verify compliance beyond system updates, starting with employee pay stubs, overtime calculations, and exempt classifications.
Verify that all pay stub details are accurate, particularly for non-exempt employees who receive overtime or variable pay. Confirm that salaried exempt employees meet the qualifying threshold in accordance with updated state rules.
Document your audit results and any corrective actions taken.
Reassess Compliance and Labor Practices
Many operators use this date not only to adjust wages, but to reset broader compliance practices. This is a natural opportunity to revisit your labor strategy:
- Update scheduling models and labor targets
- Reevaluate bonus and tip distribution policies
- Refresh onboarding and handbook content
- Conduct internal audits or documentation reviews
Even if your business is already compliant, July 1 is a smart trigger to future-proof your processes.
Set Up a Wage Compliance Calendar
Minimum wage changes aren’t going away. Many jurisdictions update rates annually, typically in July or January, often in response to inflation. Instead of reacting each time, build a repeatable process:
- Set a recurring calendar reminder in June and December
- Assign one person or team to monitor wage laws
- Keep a log of wage changes and your company’s response
Forte Can Help Restaurants Stay Compliant and Confident
Forte’s automated, rule-based workflows help multi-location restaurants stay ahead of labor law changes and ensure wage rules are applied correctly across all systems. From tip pool calculations to break penalties, location-based wage assignments, and approval routing, Forte streamlines manual work and helps validate payroll setups to flag potential compliance issues before they happen.
If you’re updating wages or workflows ahead of July 1, now is the time to see how Forte can help. Request a demo to see Forte’s payroll validation and wage compliance workflows in action.