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What You Need to Know About New Mexico’s Minimum Wage

As always, to make sure your business is prepared and stays in compliance, we recommend that you discuss these upcoming changes to minimum wage laws in New Mexico with your accountant and lawyer. This article does not constitute legal advice.
Meredith Galante, Writer

Throughout the country, state legislators are deciding what a fair minimum wage should be in their state. With so many laws changing, it can be confusing to follow what’s happening closer to home.

We’ve got you covered on what’s happening next for the New Mexico minimum wage, and what you need to do as a small business owner to be prepared.

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What is the minimum wage in New Mexico?

The New Mexico minimum wage is $9.00, $1.75 higher than the federal minimum wage. The minimum wage in New Mexico was last changed in 2008, when it was raised by $1 from $6.50 to $7.50. For those who work more than 40 hours in a single week, they qualify for overtime pay in New Mexico, which is $13.50 per hour for all overtime hours worked.

However, some cities and counties within the state have higher local minimum wages. Your business is required to pay its workers whichever rate is higher, state, or local.

For instance, the minimum wage in Albuquerque, New Mexico is $9.35. There are some exceptions to this. If the employer provides healthcare or childcare benefits, the required minimum wage is $8.45. For tipped employees in Albuquerque, the minimum wage is $5.60. Other cities where the pay is higher than the New Mexico minimum wage are:

  • ernalillo County: the minimum wage is $9.05

  • Las Cruces: the minimum wage is $10.25.

  • Santa Fe County: employers must pay workers $11.80, and $3.53 tipped wage

Will New Mexico’s minimum wage change in 2021?

Yes. Effective January 1, 2021, the New Mexico minimum wage increase will be $1.50 more than the 2020 minimum wage, or $10.50 an hour. For tipped employees, it will increase to from $2.35 to $2.55 per hour.

Are there plans to change the minimum wage beyond 2021?

The New Mexico minimum wage history showed little movement until the passing of HB 31. Under the phased increase approach, the 2021 New Mexico minimum wage will increase from $9.00 per hour to $10.50 per hour starting January 1, 2021. The phased increases mean that at the start of the new year, the New Mexico minimum wage will steadily increase each year until 2023. The New Mexico minimum wage increase schedule is as follows:

  • Effective January 1, 2021: $10.50 per hour
  • $2.55 per hour for tipped employees
  • Effective January 1, 2022: $11.50 per hour
  • $2.80 per hour for tipped employees
  • Effective January 1, 2023: $12.00 per hour
  • $3.00 per hour for tipped employees

How should small business owners prepare for changes to the minimum wage?

Knowing the schedule of New Mexico’s minimum wage increase can help you plan accordingly. However, there are other steps you can take to help offset any cost associated with the rising wages.

  • Do an audit: Take time to analyze your business spending to see where you could cut costs and save. And because time is money, make sure you’re utilizing technology that can help you be more efficient. Using automatic payroll is one easy option you can implement right away. Square Payroll software has loads of custom payroll features all at small business pricing.

  • Minimize turnover:Hiring and training staff can get expensive, so you may want to focus on minimizing staff turnover. Hiring the right people and successfully onboarding them is important. Also, think of ways to retrain your staff to ensure performance is high and staff members feel equipped with the skills to do their job.

  • Stay in compliance:To protect your business and pay your employees fairly, find an accountant who is familiar with your local laws and can help guide you on what’s required where your business and employees are.

Whether it’s providing COVID-19 small business resources, informing you on the New Mexico minimum wage, or helping you get a free EIN, Square is here to help both you and your business find success.

Meredith is a freelancer writer based in New York City. She’s been writing for Square since 2017 where she’s covered everything from the best software for restaurants to use to maximize profit, minimum wage laws across the country, and tips for entrepreneurs to maximize their impact.