Missouri Minimum Wage: Minimum Wage in Missouri for 2024

December 26, 2023

As a restaurant owner, business operator, or employer in the food service industry in Missouri, staying informed about the state's minimum wage regulations is crucial for ensuring compliance and planning your business strategy. This blog post will guide you through the essentials of the Missouri minimum wage and what to expect in 2024.

What is the Minimum Wage in Missouri?

Understanding the minimum wage in Missouri is fundamental for business owners to ensure fair compensation and legal compliance. In 2023, the minimum wage stands at $12.00 per hour. This rate applies to private sectors and employees not covered by exemptions.

Looking ahead, the minimum wage in Missouri for 2024 is projected to see a slight increase, reaching approximately $12.30 per hour. This change reflects the ongoing adjustments in the labor market and the state's commitment to ensuring a fair wage for all workers.

Minimum Wage for Tipped Employees in Missouri

In 2024, tipped employees will have a base wage of at least half the standard minimum wage, amounting to $6.15 per hour.

Employers need to understand that this base wage is just a starting point. The total earnings of a tipped employee, comprising their base wage plus tips, must meet or exceed the full minimum wage of $12.30 per hour.

If an employee's tips do not make up the difference in reaching the standard minimum wage, employers are legally obligated to compensate for the shortfall. This ensures that all employees are guaranteed at least the minimum hourly wage regardless of the tips they receive.

Historical Minimum Wage Rates in Missouri

Missouri has seen a consistent upward trend in its minimum wage rates over the past decade. Here's a quick overview:

2013 - $7.35

2014 - $7.50

2015 - $7.65

2016 - $7.65

2017 - $7.70

2018 - $7.85

2019 - $8.60

2020 - $9.45

2021 - $10.30

2022 - $11.15

2023 - $12.00

2024 – $12.30

This gradual increase clearly indicates the state's commitment to ensuring a fair living wage for workers. As employers, it's crucial to be aware of these figures and plan accordingly to ensure compliance and maintain a stable business operation.

Source: Labor Law Center

How is the Missouri Minimum Wage Set?

The minimum wage in Missouri is determined through a process that balances legislative action with economic indicators. This ensures that the wage rate is fair and reflects current economic conditions.

Gradual Increases

The journey to the current Missouri minimum wage began with the passage of Proposition B by Missouri voters in November 2018. This legislation set the stage for a series of incremental increases to the minimum wage, culminating in a $12.00 per hour rate by 2023. These gradual increases, which started in 2019, have been instrumental in providing a predictable and manageable wage structure for employers across the state.

Cost-of-Living Adjustments

Looking ahead to 2024 and beyond, the minimum wage in Missouri will be subject to annual adjustments. These adjustments are closely tied to the Consumer Price Index (CPI) for Urban Wage Earners and Clerical Workers. This means that if the CPI sees an upward trend, the minimum wage in Missouri will adjust accordingly to reflect the increased cost of living. On the flip side, if the CPI decreases, the minimum wage may also decrease, but it will never fall below the federal minimum wage.

Missouri State Minimum Wage vs Federal Minimum Wage

Before we compare Missouri's state minimum wage to the federal minimum wage, let's briefly review the foundations of minimum wage law.

The Fair Labor Standards Act establishes the right to a minimum wage, which is enforced by the Department of Labor's Wage and Hour Division. This sets the baseline for wages across the country, ensuring that workers receive fair compensation for their labor.

Federal Minimum Wage Guidelines

The current federal minimum wage is $7.25 per hour for most nonexempt workers. For employees who receive tips, like many in the restaurant industry, the minimum wage is $2.13 per hour. However, the total earnings (tips plus wages) must reach at least the standard federal minimum wage of $7.25 per hour. If the combined amount falls short, employers must make up the difference.

State Minimum Wages

While the federal minimum wage provides a baseline, states and cities might set higher minimum wages. In cases where state and federal minimum wages differ, the higher rate prevails. This is where understanding your state's specific regulations becomes essential.

Missouri Minimum Wage Exemptions

For employers across all industries, understanding the specific exemptions within the Missouri minimum wage law is essential. Below is a streamlined overview of these key exemptions:

General Rule: All businesses in Missouri are mandated to adhere to the minimum wage of $12.30 per hour. However, exceptions exist for specific business types and employee roles.

Retail and Service Business Exception: If your business falls under retail or service and has annual gross sales under $500,000, the minimum wage law does not obligate you to the $12.30 per hour rate.

Specific Employee Exemptions: As Section 290.500(3), RSMo states, certain employees are exempt from the minimum wage requirement. These include:

Employees in executive, administrative, or professional roles
Volunteers or those in educational, charitable, religious, or nonprofit organizations where no employer-employee relationship exists
Foster caregivers standing in loco parentis
Seasonal employees in children's camps or educational conference centers (less than four months annually)
Students working in educational organizations in lieu of tuition, housing, or fees
Occasional private residence employees working less than six hours per occasion
Disabled individuals in certified sheltered workshops
Casual babysitters
Specific transport industry employees under 49 U.S.C. §§ 10101 et seq.
Casual or intermittent employees like golf caddies, newsboys
Salespersons with partial commission-based earnings and minimal employer control over working hours and location
Certain government positions under 29 U.S.C. §§ 203(e)(2)(C)(i)-(ii)
Employees of smaller retail or service businesses earning less than $500,000 annually
Incarcerated individuals under section 217.010
Employees under section 29 U.S.C. 213(a)(8)

Agricultural Sector Exemptions: Detailed in Section 290.507, RSMo, the law exempts certain agricultural workers, including:

Employees of small-scale agriculture businesses (less than 500 person-days in any quarter of the preceding year).
Immediate family members of the employer.
Seasonal hand harvest laborers paid on a piece rate basis.
Young agricultural workers (16 or under) working on the same farm as their parents or guardians.
Employees mainly involved in livestock range production.

Understanding these exemptions is critical for ensuring your business complies with the Missouri minimum wage laws while recognizing situations where different rules apply. As we move into 2024, keeping abreast of these details will help you make informed decisions for your restaurant or business.

Missouri Minimum Wage & Labor Law Posters

Compliance with Missouri's labor laws is crucial for ensuring a fair and legal working environment. Part of this compliance involves displaying a series of mandatory posters and notices in the workplace, such as:

Notice to Victims of Domestic and Sexual Violence Leave Time Allowed (LS-112): Inform employees about their leave rights concerning domestic and sexual violence.
Notice to Workers Concerning Unemployment Benefits (MODES-B-2): Provides essential information on unemployment benefits rights and processes.
Workers' Compensation Law (WC-106): Informs employees about their rights and procedures under workers' compensation laws.
Discrimination in Employment (MCHR-9): Educates employees about their rights against employment discrimination
Missouri Minimum Wage Law (LS-52): Details the specifics of Missouri's minimum wage, particularly pertinent in the restaurant industry.
Employer's Employing Workers Under the Age of 16 List (LS-43): Necessary for employers of minors, outlining youth employment laws.
Discrimination in Housing (MCHR-6) and Discrimination in Public Accommodations (MCHR-7): Inform about discrimination laws beyond the workplace.

Understanding and implementing these notices is a legal requirement and a step towards creating a transparent and compliant workplace. Each poster plays a role in informing your employees about their rights and your responsibilities as an employer.

How Will the Minimum Wage Increase Impact My Business?

The impending rise in Missouri's minimum wage presents several challenges and opportunities for your business. Here’s how:

1. Increased Labor Costs

The increase in the minimum wage will inevitably lead to higher labor costs. As wages go up, your business will see an increase in payroll expenses. This change means you'll need to carefully assess your staffing needs and productivity to maintain profitability. Creative staffing solutions and efficiency improvements could be vital in managing these increased costs.

2. Budget Adjustments

With higher wages, your operational budget will need a thorough review. You may need to find ways to offset the increased labor costs, possibly through cost-cutting in other areas or streamlining operations. Maintaining quality and service while managing a higher wage bill is a delicate balance.

3. Pricing Strategy Reassessment

Revisiting your pricing strategy might be necessary to accommodate the higher wage expenses. This reassessment doesn’t necessarily mean increasing prices; it could also involve rethinking your menu, specials, or promotions to maximize revenue without alienating your customer base.

4. Employee Morale

On a positive note, a higher minimum wage can enhance employee morale. Satisfied employees are often more productive and committed, which can translate into better customer service and reduced turnover. This improvement in employee morale could be a significant asset for your business.

How Can I Prepare My Business for the Minimum Wage Increase?

Preparing your restaurant for the Missouri minimum wage increase in 2024 involves strategic planning and operational adjustments. Let’s explore how you can effectively adapt to these changes.

1. Financial Planning:

The first step is updating your financial forecasts to reflect the new wage rates. This means recalculating your labor costs, adjusting your pricing strategy if necessary, and perhaps reevaluating your operating hours. A thorough financial analysis will help you understand the impact of the increased wages on your profitability and cash flow.

2. Staff Training and Productivity:

Another key aspect is enhancing staff efficiency through training. Investing in your employees’ skills can improve service quality, create faster turnaround times, and improve customer satisfaction. Efficient staff can handle more tasks and serve more customers, offsetting some of the increased labor costs.

3. Restaurant Technology Utilization:

Embracing technology can significantly boost your restaurant's efficiency. Consider these options:

Handheld POS: These devices streamline the ordering process, reducing wait times and enhancing customer experience.
Cloud-Based Point of Sale: This offers flexibility and real-time data analysis, helping you make informed business decisions.
QR Code Ordering: Implementing QR code menus and digital menus facilitates swift ordering, reducing staff workload and enhancing the customer experience.
Self-Service Kiosks: These can reduce staffing needs for order taking and offer a modern, efficient customer experience.
Waitlist & Reservation Systems: This technology helps manage customer flow and reduces wait times.
3rd Party Delivery Integration: Capitalize on the growing demand for delivery services without overburdening your staff.
Mobile POS System: Offers mobility and efficiency, especially useful during peak hours.
Tablet-Based POS System: Utilizing iPad or Android-based systems can enhance order accuracy and speed.
Restaurant Loyalty Program: Encourage repeat business with a customer loyalty program.
Restaurant CRM: Understanding your customers better can lead to more targeted marketing and improved service.

4. Consulting Experts:

Finally, don’t hesitate to seek advice from industry experts, financial advisors, or business consultants. They can offer tailored advice to navigate the changes and strategize for success.

Adapting to the minimum wage increase in Missouri is about more than just compliance. It's an opportunity to reassess, innovate, and potentially grow your business. By taking proactive steps, you can turn this challenge into a competitive advantage.

Don't let the minimum wage increase catch you off guard. Book a free demo or consultation with Chowbus Restaurant POS today and ensure your restaurant is ready for 2024.

Frequently Asked Questions About Missouri Minimum Wage

Here are the answers to some common questions regarding Missouri's minimum wage, including current rates and future projections.

What is the Average Wage in Missouri?

In 2022, the Missouri Economic Research and Information Center reported an average annual wage of around $60,159, equating to $28.92 per hour.

However, more recent figures from December 2023 by ZipRecruiter show a slightly lower average annual salary of approximately $50,264 or $24.17 per hour. Workstream provides another perspective, indicating an average hourly wage of $21.07, leading to an annual figure close to $43,825.

It's crucial to note that these averages can fluctuate based on job role, experience level, and location within Missouri. Keeping these figures in mind helps you as an employer to remain competitive and fair in your wage offerings.

What is the Minimum Wage in St. Louis, Missouri?

The minimum wage in St. Louis, Missouri, aligns with Missouri's statewide minimum wage. Notably, from May 5 to August 28, 2017, St. Louis had a higher minimum wage than the state. However, a law enacted on August 28, 2017, mandated that all Missouri municipalities, including St. Louis, adhere to the state's minimum wage standard.

What Will the Minimum Wage Be in 2026 in Missouri?

Missouri's minimum wage will be $15.00 per hour by 2026. This increase is mandated by SB 407, which stipulates a yearly increase of $1.00 starting in 2024 after reaching $12.00 per hour in 2023. Following 2026, adjustments will be made annually based on changes in the Consumer Price Index.

Disclaimer: This blog post is intended for informational purposes only and is not to be considered as legal or professional advice. While we strive to provide accurate and up-to-date information about Missouri's minimum wage regulations, readers should consult a qualified professional or legal advisor for specific advice tailored to their situation. Laws and regulations may change, and the information provided here may not reflect current legal developments.