What is the minimum wage in New Mexico?

Many states have raised or adjusted the minimum wage in recent years. As such, it’s important that employers be well-informed regarding minimum wage laws and regulations to ensure that their business stays in compliance. The current minimum wage in New Mexico is $10.50 per hour. Employers should know that some businesses or employees may be exempt from minimum wage but still covered by the protections of the Fair Labor Standards Act.

New Mexico minimum wage laws

Governing bodies on federal, state and sometimes local levels design minimum wages to provide fair labor compensation to eligible employees. This means that employees are provided a base level of pay that should facilitate access to basic needs such as housing, health care, food and other living essentials.

The current minimum wage in New Mexico is $10.50 per hour, up from $7.50 in 2008. New Mexico has scheduled further increases in the minimum wage of $11.50 per hour by January 2022 and $12.00 per hour by January 2023. According to Bill 31, minimum wage will be adjusted and increased for the rising cost of living. While state minimum wage changes in New Mexico have been historically uncommon, cities and counties within the state have set their own minimum wages. Employers should be aware that higher minimum wage rates may apply in Albuquerque, Santa Fe, Bernalillo County and other regions.

Some employees may be exempt from standard minimum wage rates, including:

• Trainees
• Apprentices
• Employees with disabilities
• Learners

Even if employees are exempt from the New Mexico minimum wage, they may still be entitled to federal minimum wage under FLSA coverage. In areas where employers are subject to either federal, state or local minimum wage, they will pay whichever rate is highest.

Employers in New Mexico may be required to display posters that provide information to employees regarding minimum wage and overtime as per state regulations. Other cities and counties, such as Albuquerque, may also require employers to display posters. Posters should be displayed somewhere accessible and obvious.

Should employers fail to compensate employees fairly for work performed, be it minimum wage or overtime rates, they may be subject to civil actions or appeals in court. The court may then issue a warrant to collect wages for the employee.

New Mexico minimum wage for servers and other tipped employees

Many states provide different minimum wage rates for regular employees and tipped employees, respectively, but all eligible employees are still entitled to the total minimum wage rate of $10.50 per hour. The minimum wage in New Mexico for tipped employees is $2.55 per hour. Tipped employees are defined as those that regularly earn at least $30 every month in tips. Employers should consider that employees who are exempt from New Mexico minimum tipped wage may still qualify for federal tipped minimum wage under FLSA coverage.

Tip credits

In many states, if a tipped employee’s regular cash rate in combination with their tips doesn’t meet the regular minimum wage rate, their employer may apply a tip credit to compensate for the difference. In New Mexico, employers may apply up to $7.95 per hour to an employee’s combined wages and tips so that they receive the regular minimum wage rate of $10.50 per hour. In some cases, employees may not be entitled to a tip credit when working significant hours doing non-tipped tasks, even if they typically earn tips.

Tip pooling

Many states permit employers to require their employees to contribute a portion or all of their tips to a tipping pool. A tipping pool distributes tips equally among entitled employees, often according to hours or shifts worked. While untipped employees such as cooks or dishwashers earn tips this way, employers and managers aren’t usually permitted to withdraw tips from the pool.

While tipping pools can sometimes compensate for the difference between tipped minimum wage and regular minimum wage, it may also result in a reduced rate for all employees. In that case, employers may need to pay the difference to employees whose cash rate and pooled tips do not meet minimum wage requirements.

Types of tipped employees

Tipped employees are often defined as those who regularly receive additional voluntary compensation from clients or customers. As such, mandatory service charges or commissions can’t be counted toward tipped earnings. Types of tipped employees include:

• Counter personnel
• Bussers
• Bartenders
• Servers
• Baristas
• Estheticians
• Hairstylists
• Bellhops

Ensuring that employees are paid minimum wage

To make sure that employees are fairly compensated and that businesses stay in compliance with New Mexico minimum wage laws and regulations, employers should implement a system that closely tracks and records employee earnings. This can help employers to identify employee earnings for regular wage rate, overtime, tips and other types of earnings. Employers may choose to use payroll software or a system that accounts for all cash and credit card tips in addition to any other wages or earnings.

New Mexico minimum wage overtime pay

In circumstances where employees work more than 40 hours in a given workweek, they may be entitled to overtime pay. Employers must pay eligible employees an overtime rate for every hour of overtime work performed. Overtime is calculated as at least one and a half times an employee’s regular wage.

Certain employees, such as those paid by salary or in certain roles or industries, may not be entitled to overtime pay. If not, consider that employers may still be designated as non-exempt under FLSA and therefore still entitled to overtime rates.

New Mexico minimum wage FAQs

What states have a $15 an hour minimum wage?

The District of Columbia is the only place to currently implement a $15 an hour minimum wage, although many other states have begun to phase in a higher rate in coming years. New Mexico doesn’t have scheduled plans to raise the minimum wage to $15 an hour, although the state plans to adjust rates depending on the cost of living.

What is the minimum wage for a 16-year-old in New Mexico?

Employers in New Mexico aren’t permitted to pay minors a reduced minimum wage rate based on minor status. Minors may be subject to a reduced pay rate if they qualify as a learner, apprentice or other minimum wage-exempt worker.

What is a livable salary in New Mexico?

A livable salary is defined as the base level of income necessary to provide a person with a decent standard of living and access to basic needs such as health care, housing, food and other essentials. The livable salary in New Mexico is $48,000 according to the World Population Review.

What is the minimum a salaried employee can make?

New Mexico doesn’t have a defined minimum salary, but an employee that works an average of 40 hours per week at minimum wage should expect to earn $21,900. Non-exempt employees may be entitled to a minimum salary according to the FLSA, which is $684 per week or $35,568 per year.

What is the federal minimum wage?

The federal minimum wage for non-exempt employees covered by the FLSA is $7.25 per hour compared to New Mexico’s $10.50 per hour. The federal minimum tipped wage is $2.13 per hour, while New Mexico’s minimum tipped wage is $2.55 per hour.