Montana’s minimum wage will increase 35 cents an hour to $10.30, or by 3.5%, beginning Monday, the state said.
It is $3.05 higher than the federal minimum wage rate of $7.25 per hour, which has been at that rate since 2009, according to masslive.com. That represents the longest stretch the federal minimum wage has remained unchanged since it was established in 1938. Montana will join 28 other states with a minimum wage above $10 an hour.
The minimum wage is subject to a cost-of-living adjustment based on the Consumer Price Index no later than Sept. 30 of each year, the Montana Department of Labor and Industry said in a posting on its website. Montana's minimum wage is to be the greater of the federal or current Montana minimum wage.
For a 40-hour week, that wage now brings in $412 a week or $21,424 a year. The U.S. Census Bureau said the median household income in Montana in 2022 was $66,341.
The department notes that a business not covered by the Fair Labor Standards Act whose gross annual sales are $110,000 or less may pay $4 per hour.
“However, if an individual employee is producing or moving goods between states or otherwise covered by the Fair Labor Standards Act, that employee must be paid the greater of either the federal minimum wage or Montana’s minimum wage,” the state said.
No tip credit, meal credit or training wage is allowed under Montana's Wage & Hour Laws.
While the increase is helpful, some say the wage is still not high enough for working families.
"While the inflationary adjustment helps factor in rising costs, we know that many families in lower wage sectors continue to struggle to afford basic necessities, including housing, food, and child care,” said Heather O’Loughlin, executive director of the Montana Budget and Policy Center, a nonprofit group that provides in-depth research and analysis on budget, tax and economic issues.
In 2021, the state’s minimum wage was $8.75 an hour. In 2022, it was $9.20 an hour. Former Gov. Steve Bullock, as a private citizen, led ballot initiative I-151 in 2006, which required the minimum wage be adjusted annually for inflation.
Minimum-wage increases will go into effect in 22 states on Jan. 1, and three more states will raise their minimum wage later in the year. The increases range from 23 cents to $2, putting the new state minimum wages in the range of $10.30 to $16.28, according to Marketwatch.com. The state of Washington will have the highest hourly minimum wage of $16.28 an hour, followed by California at $16.
Marketwatch said nearly 10 million workers in the United States stand to benefit from the state minimum-wage increases on Jan. 1, according to estimates from the Economic Policy Institute, a left-leaning think tank. Montana officials were unable to immediately say how many Montana workers would benefit from the wage increase.
The wages for workers in 20 states will continue to be governed by the federal minimum wage of $7.25.
For more information, contact the Montana Department of Labor and Industry, P.O. Box 201503, Helena MT 59620-1503. PHONE 406-444-6543 or email DLIERDWage@mt.gov
Assistant editor Phil Drake can be reached at 406-231-9021.
MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.