New Mexico Minimum Wage

Staying informed about New Mexico's minimum wage laws is essential for your business. Changes in wage rates can affect payroll, budgeting, and compliance responsibilities. This guide breaks down the current minimum wage rates, upcoming changes, and their implications for you and your team. Read on to prepare for what's ahead.

What is the New Mexico Minimum Wage Rate for 2024?

For 2024, the New Mexico labor laws state that the minimum wage remains at $12.00 per hour for most employees.

Current Rate Details

• Standard Minimum Wage: $12.00 per hour.
• Tipped Employees: The minimum cash wage for tipped employees is $3.00 per hour. Employers must ensure that tips plus base wages reach at least $12.00 per hour. If not, you must cover the difference.
• Youth Employees: Workers under 18 can be paid a training wage of $10.50 per hour during their first 90 days of employment.

Remember, New Mexico's minimum wage is higher than the federal rate of $7.25 per hour, so you must pay the higher state rate.

Annual Adjustments Explanation

Gradual increases starting in 2019 led to the current $12.00 rate. Although there was no increase from 2023 to 2024, staying updated on future adjustments is essential, as wage rates can change based on legislation or inflation adjustments, affecting your payroll and budgeting.

Scheduled Future Increases to New Mexico Minimum Wage

While the state minimum wage remains at $12.00 per hour, some local areas have scheduled increases you need to know about.

Timeline for Wage Rate Increases

In certain cities, local ordinances have established higher minimum wage rates that surpass the state requirement. For example, Las Cruces has scheduled an increase in its minimum wage to $12.65 per hour, effective January 1, 2025. This change reflects the city's effort to align wages with the cost of living and support its workforce.

• January 1, 2025: Las Cruces minimum wage increases to $12.65 per hour.
• January 1, 2025: Albuquerque plans to adjust its minimum wage. Since the state minimum wage is higher at $12.00 per hour, you must continue to pay the state rate in Albuquerque.

Manage the Impact on Payroll Budgeting

These scheduled increases will directly affect your payroll expenses if you're operating in cities like Las Cruces. Here's how to prepare:

• Review Local Wage Laws: Stay informed about minimum wage changes in the cities where your business operates.
• Adjust Financial Forecasts: Incorporate upcoming wage increases into your budgeting to accommodate higher labor costs.
• Update Payroll Systems: Update your payroll systems to apply the new wage rates on time.
• Communicate with Your Team: Inform your employees about upcoming changes to maintain transparency and trust.

By preparing in advance, you can stay compliant and manage your payroll budget effectively.

Tipped Employee Minimum Wage in New Mexico

Understanding the tipped minimum wage laws in New Mexico is key to ensuring compliance.

Tipped Wage Rate Specifics

The statewide minimum cash wage for tipped employees is $3.00 per hour. You must ensure that, when combined with tips, your tipped employees earn at least $12.00 per hour. If an employee's tips do not bring their hourly earnings up to this amount, you're responsible for compensating the difference.

Several cities in New Mexico have higher minimum wages for tipped workers:

• Albuquerque: $7.50 per hour
• Las Cruces: $4.95 per hour
• Santa Fe (City): $3.00 per hour
• Santa Fe County: $4.38 per hour

Ensure you're adhering to the higher local rates if applicable.

Utilize the Tip Credit Allowance

New Mexico allows you to take a FLSA tip credit, meaning you can pay tipped employees less than the standard minimum wage as long as their tips bring their total hourly earnings to at least $12.00. To comply with tip credit regulations, you should:

• Maintain Accurate Records: Keep detailed records of tips earned by each employee.
• Regularly Monitor Earnings: Ensure total earnings meet or exceed the minimum wage.
• Inform Employees: Clearly communicate tip credit provisions and their rights under the law.
• Adjust Wages if Necessary: Be prepared to increase wages if tips are insufficient.

By effectively managing tips for employees and staying informed about state and local requirements, you can ensure fair compensation for your tipped staff.

Minimum Wage Rates in Specific Cities and Counties

Minimum wage rates in New Mexico can vary by city or county, so it's essential to be aware of local differences.

Local Wage Rate Variations

Several cities and counties have set their own minimum wage rates above the statewide rate of $12.00 per hour. These local rates are mandatory for employers operating within those jurisdictions.

Notable City-Specific Rates

Here are the current minimum wage rates for notable cities and counties:

• Albuquerque:
• Standard Minimum Wage: $12.50 per hour
• Tipped Minimum Wage: $7.50 per hour
• Las Cruces:
• Standard Minimum Wage: $12.36 per hour
• Tipped Minimum Wage: $4.95 per hour
• Santa Fe City and County:
• Standard Minimum Wage: $14.60 per hour
• Tipped Minimum Wage:
• City: $3.00 per hour
• County: $4.38 per hour
• Bernalillo County:
• Standard Minimum Wage: $12.00 per hour
• Tipped Minimum Wage: $3.00 per hour

Some localities adjust their minimum wage rates annually based on the Consumer Price Index (CPI). Stay updated on these changes by checking official city or county websites.

By keeping informed about local minimum wage rates, you can ensure your business remains compliant and your team is fairly compensated.

Compliance Requirements for Employers

To comply with New Mexico's wage and hour laws, you must adhere to specific documentation and notification obligations.

Proper Documentation and Record-Keeping

• Keep Detailed Records: Track hours worked, wages paid, tips received, and any deductions or credits applied.
• Classify Employees Correctly: Ensure employees are properly classified as exempt or non-exempt.
• Maintain Records: Retain payroll records for at least three years.
• Use Reliable Tools: Utilize payroll software or time-tracking apps to streamline record-keeping.

Posting and Notification Obligations

• Display Required Posters: Place state and federal minimum wage posters in a visible location for all employees.
• Inform Your Team: Communicate any changes in wage rates or policies promptly.
• Provide Pay Statements: Give detailed pay stubs that show hours worked, wages earned, and any deductions.

By following these steps, you can avoid penalties and build trust with your team.

Tips for Preparing for Minimum Wage Changes

Staying ahead of minimum wage changes helps you manage your business effectively. Here are some tips to prepare:

• Review Your Budget: Adjust your financial plans to account for increased labor costs.
• Evaluate Staffing Needs: Assess your staffing levels and consider cross-training employees to maintain efficiency.
• Update Employment Policies: Revise any policies affected by wage changes, such as overtime calculations.
• Communicate with Your Team: Keep your employees informed about upcoming wage increases and how it affects them.
• Seek Professional Advice: Consult with HR professionals or legal advisors if you're unsure about compliance requirements.

By taking these steps, you can adapt smoothly to wage changes and continue to support your team.

New Mexico Minimum Wage Compared to Federal Minimum Wage

New Mexico's minimum wage laws set the state minimum wage significantly higher than the federal rate of $7.25 per hour.

Difference Between State and Federal Rates

The primary difference between the federal and state minimum wage rates is the amount you must pay your employees. New Mexico's rate of $12.00 per hour exceeds the federal rate by $4.75. This increase reflects the state's efforts to align wages with the cost of living and inflation over time.

Which Rate Applies

When federal and state minimum wages differ, you must pay the higher rate. In New Mexico, that means paying at least $12.00 per hour to your employees to remain compliant and support their well-being.

Penalties for Non-Compliance with Minimum Wage Laws

Failing to adhere to New Mexico's minimum wage laws can lead to serious consequences due to labor law violations.

Consequences of Violations

Non-compliance may result in:

• Financial Penalties: Fines imposed by state authorities for each violation.
• Back Pay Obligations: Requirements to compensate affected employees for unpaid wages.
• Legal Action: Employees may pursue legal action against you.
• Reputational Damage: Harm to your business's reputation within the community.

To avoid these outcomes:

• Stay Informed: Keep up-to-date with wage laws and changes.
• Audit Regularly: Perform internal audits of your payroll practices.
• Educate Management: Ensure that all managers understand and enforce compliance requirements.

By actively managing compliance, you protect your business and show your commitment to fair labor practices.

Simplify Compliance with the Right Tools

Managing minimum wage compliance doesn't have to be a challenge. With the right tools, you can stay on top of wage changes, keep accurate records, and ensure your team is paid correctly.

At Homebase, we're here to help you run your business smoothly. Our HR and compliance solutions make it easy to manage payroll, scheduling, and more—all in one place. You can:

• Automate Payroll Calculations: Reduce errors and save time with automatic payroll systems.
• Stay Informed: Receive updates on wage laws and compliance requirements.
• Manage Schedules Efficiently: Create and share schedules your team will appreciate.
• Keep Accurate Records: Track hours and wages with ease.

Don't let compliance issues slow you down. Simplify your workday and focus on what you do best—making your team thrive. Get started today with Homebase's HR and compliance solutions.

‍