Montana starts 2023 with a new minimum wage

Montana’s minimum wage will increase on January 1, 2023, from $9.20 to $9.95 per hour. The $0.75 increase is the largest increase in over fifteen years. The new minimum wage applies to every Montana employer, except for farmers and ranchers who pay employees on a fixed rate of compensation.

New rate

Montana voters passed ballot initiative I-156 in 2006, which requires the Department of Labor and Industry (DOLI) to adjust minimum wage each year to account for changes in inflation as reflected in the Consumer Price Index for Urban Consumers (CPI-U).

The CPI-U increased by 8.26% from August 2021 to August 2022, which equates to an $.76 per hour increase. Since state law requires the minimum wage to be rounded to the nearest five cents, the increase will be $0.75 per hour to $9.95. The Montana Department of Labor and Industry attributes this significant increase to the higher inflation that Montana and the rest of the country has experienced over the past year.

History of Montana and federal minimum wage

The $0.75 per hour increase in 2023 is the largest increase since the new minimum wage calculation was put in place in 2007. This is in stark contrast to the federal minimum wage, which has held at $7.25 since 2009.

In 2007, Montana’s minimum wage was $6.15 per hour, while the federal minimum wage was $5.85 per hour. In 2009, however, the federal minimum wage surpassed Montana’s minimum wage, which was $6.90, when it was increased to $7.25. As stated above, the federal minimum wage has stayed at $7.25 since this increase in 2009.