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Rhode Island Minimum Wage: Employers’ Guide

10 min read
Rhode Island minimum wage

As an employer in Rhode Island, it’s crucial to stay updated on the state’s minimum wage regulations to ensure you’re adhering to the law and compensating your employees fairly. The Rhode Island minimum wage serves as the baseline hourly pay that businesses must provide their workers, and it’s set to increase gradually over the coming years.

This comprehensive guide will explore the Rhode Island minimum wage, including the current rate, upcoming changes, exemptions, and additional wage laws that employers in the nation’s smallest state need to be aware of.

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Minimum Wage in the US: How It Works

The minimum wage in the United States is a complex system with multiple tiers, each set by a different level of government: federal, state, and municipal. This progressive approach ensures that workers across the country receive a fair wage in line with local economic conditions.

Federal Minimum Wage

As the baseline, the federal minimum wage is the lowest hourly rate that employers are legally allowed to pay their employees. It is set by the Fair Labor Standards Act (FLSA) and was last raised in 2009 to $7.25 per hour. This rate, which ensures that employers comply with a basic level of compensation regardless of their location or industry, has not been adjusted since 2009, and it is significantly lower than the median hourly wage of all workers in the United States ($18.04 per hour).

State Minimum Wages

Recognizing regional variations in cost of living and economic factors, many states have enacted their own minimum wage laws that are higher than the federal rate. These state-level mandates ensure that workers in higher-cost areas receive a wage that reflects their cost of living. For instance, California’s minimum wage is currently $15.50 per hour (increasing to $16 on January 1, 2024), while Georgia’s is $5.15 per hour (although employers covered by the FLSA must adhere to the federal minimum wage).

Municipal Minimum Wages

To further address local economic realities, some cities and counties have implemented their own minimum wage ordinances that are higher than both the federal and state rates. This approach ensures that workers in urban centers, where the cost of living is often higher, receive a wage that reflects their specific circumstances. New York City, for example, has a minimum wage of $15.00 per hour for all workers, including those who receive tips. This is slightly higher than New York’s state minimum wage rate of $14.20 per hour.

In addition to regional differences, the minimum wage can also be adjusted based on industry. For example, the minimum wage for tipped employees in the restaurant industry is typically lower than the minimum wage for non-tipped employees. This is because tipped employees are expected to receive a significant portion of their income from tips. However, in some states, employers are required to make up the difference if the employee’s hourly wage plus tips does not equal at least the minimum wage. More on this below.

Benefits of a Tiered Minimum Wage Structure

A tiered minimum wage structure, which establishes different minimum wage rates based on factors such as location, industry, or experience level, offers several benefits for both workers and employers.

For workers:

  • Accommodates different cost of livings. Tiered minimum wages ensure that workers in high-cost-of-living areas receive a wage that reflects the higher expenses they face, providing them with a more livable wage.
  • Recognizes experience and skills. By establishing different minimum wages for workers with varying levels of experience or skills, tiered systems reward those who have invested in their professional development.
  • Reduces disparities. By addressing the wage gap between experienced and newer workers, tiered minimum wages promote fairness and equity within the workforce.

For employers:

  • Flexibility in labor costs. Tiered wages allow employers to adjust their labor costs more effectively, aligning them with the specific needs and dynamics of their business operations.
  • Retention of experienced workers. A tiered system can incentivize experienced workers to stay with the company by offering them higher wages, reducing turnover costs.
  • Attracting talent in high-cost areas. By matching minimum wages to local cost of living, businesses can attract and retain talent in areas with higher living expenses.

History of the Rhode Island Minimum Wage

The minimum wage in Rhode Island has evolved over time, reflecting changing economic conditions and social values.

Here are the highlights from the Rhode Island minimum wage timeline:

  • 1947: The first minimum wage law in Rhode Island was enacted in 1947, following a wave of similar legislation across the country. The law set the minimum wage at $0.75 per hour, which was significantly higher than the prevailing wage at the time.
  • 1948 – 1976: Over the next few decades, the Rhode Island minimum wage gradually increased. In 1968, the minimum wage reached $1.25 per hour, and in 1976, it reached $2.65 per hour. With these minimum wage increases, Rhode Island became one of only three US states with a minimum wage that was higher than the federal floor (together with Alaska and Connecticut)
  • 1980s: Since 1980, the Rhode Island minimum wage has increased more frequently, reflecting a growing consensus that it should keep pace with inflation. For example, by the end of the 1980s, the Rhode Island minimum wage reached $4.45 per hour.
  • 1990s: The Rhode Island minimum wage rate increased several times during the 1990s, in line with inflation. By 1999, it had reached $5.45 per hour.
  • 2000s: The RI minimum wage increased to $6.75 per hour in 2004. It increased again to $7.10 per hour in 2006 and $7.40 per hour in 2007.
  • 2010s: Over the next decade, the Rhode Island minimum wage increased annually, reaching $10.50 per hour by 2019.
  • 2021: In May 2021, the Governor of Rhode Island signed an amendment to join other states in aiming for a $15.00 minimum wage by 2025. The amendment specified yearly increases to the Rhode Island minimum wage beginning January 2022.

Rhode Island Minimum Wage Rates

So, what is the current minimum wage in Rhode Island?

The Rhode Island minimum wage rate is currently $13.00 per hour for all employees over the age of 16. However, there is a distinction between the minimum wage for tipped and untipped workers. This recognizes the additional income that tipped workers typically receive from customers.

Untipped Workers

The minimum wage for untipped workers in Rhode Island is currently $13.00 per hour. This rate ensures that employees who do not receive tips earn a fair and livable wage, regardless of their industry or occupation. This commitment to fair wages helps to promote economic stability and ensures that workers can meet their basic needs.

Tipped Workers

For tipped workers, the minimum wage is set at $3.89 per hour. This is the base hourly rate that employers must pay, regardless of the tips that an employee receives. However, employers are also responsible for ensuring that the employee’s hourly wage plus tips equals at least the minimum wage for non-tipped workers ($13.00 per hour). In other words, the employer must make up the difference if a tipped worker receives less than $13.00 per hour in combined wages and tips. This ensures that tipped workers always earn at least the minimum wage, even if they have a slow day or do not receive a lot of tips.

However, it’s important to note that some municipalities in Rhode Island have passed ordinances that require employers to pay tipped employees a minimum wage that is higher than the standard minimum wage for tipped workers. For example, Cranston and Newport require employers to pay tipped employees at least $5.00 per hour in addition to their tips, while Providence requires employers to pay tipped employees at least $6.00 per hour in addition to their tips.

Future of the Rhode Island Minimum Wage

Is the minimum wage going up in Rhode Island?

The Rhode Island minimum wage is scheduled to increase to $14.00 per hour on January 1, 2024. It will increase again to $15.00 per hour on January 1, 2025. This is part of a phased-in plan to reach $15.00 per hour by 2025. However, these scheduled increases have been met with mixed reactions from businesses and workers alike.

For example, businesses worry that the higher minimum wage will lead to job losses and increased automation. They argue that the minimum wage should be set at a level that allows businesses to remain competitive and provide jobs for Rhode Islanders.

Workers, on the other hand, support the increase, arguing that it is necessary to ensure that all working families can afford to live in Rhode Island. They claim that the current minimum wage is not enough to cover the cost of basic necessities such as housing, food, and transportation.

The debate over the minimum wage is likely to continue, with both sides presenting strong arguments. It remains to be seen whether the phased-in increase to $15.00 per hour will have a significant impact on the Rhode Island economy and the livelihoods of its workers.

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Rhode Island Minimum Wage: Exemptions & Special Cases

The Rhode Island minimum wage rate is generally $13.00 per hour. However, there are a few exemptions and special cases that employers need to be aware of.

Tipped Workers: Exemptions

As mentioned above, the minimum wage for tipped workers in Rhode Island is $3.89 per hour. However, there are a couple of exceptions to this rule:

  • Tip credit. Employers must make up the difference if the employee’s hourly wage plus tips do not equal at least the minimum wage for non-tipped workers, which is currently $13.00 per hour. For example, if a tipped worker earns $3.89 per hour in base pay and receives $5.00 per hour in tips, the employer must pay the worker an additional $4.11 per hour to make up the difference.
  • Industry variations. Employees who work in certain industries, such as amusement and recreational establishments and theaters, may be paid a lower minimum wage for tipped workers if they regularly receive tips of at least 8% of their gross receipts. However, the employer must still make up the difference if the employee’s hourly wage plus tips does not equal at least the minimum wage for non-tipped workers.

Certain Types of Workers

In addition to the above, certain types of workers are exempt from the Rhode Island minimum wage requirement.

These exemptions include:

  • Underage workers. Employers can pay teenagers under the age of 18 a lower minimum wage for their first 90 days of employment. This reduced minimum wage is $4.81 per hour.
  • Agricultural workers. Agricultural workers are exempt from the Rhode Island minimum wage requirement for certain types of work. These exemptions include:
    • Hand harvesting of fruits, vegetables, and tree nuts.
    • Harvesting of Christmas trees.
    • Handpicking and processing of blueberries.
  • Casual laborers. Casual laborers are individuals who are hired for occasional or sporadic work. Employers can pay these individuals a lower minimum wage of $6.63 per hour.
  • Domestic workers. Domestic workers are individuals who provide cleaning, cooking, childcare, or other personal services in private homes. These workers are also excluded from Rhode Island’s state minimum wage rate of $13/hour. Instead, employers must pay them at least the highest of the federal, state, or applicable local minimum wage rates. In Rhode Island, the federal rate of $7.25 applies.

Employers should consult with the Rhode Island Department of Labor and Training (DLT) for more information on minimum wage exemptions and special cases.

Additional Rhode Island Wage Laws

In addition to the minimum wage, there are several additional wage-related laws in Rhode Island that employers must comply with. These laws cover areas including overtime pay, recordkeeping requirements, wage payment laws, and wage and hour complaints.

Overtime Pay

  • Overtime pay for non-exempt employees. Non-exempt employees must receive overtime pay at a rate of time and a half for all hours worked over 40 in a workweek.
  • Overtime calculation for part-time employees. Part-time employees must also receive overtime pay if they work more than 40 hours in a workweek.

Recordkeeping Requirements

  • Payroll records. Employers must maintain accurate payroll records for all employees. These records must include hourly wages, overtime pay, and any deductions.
  • Recordkeeping period. Employers must maintain these records for at least three years.
  • Accessibility for inspection. These records should be readily accessible for inspection by the DLT.

Wage Payment Laws

  • Regular pay schedule. Employers must pay employees their wages on an agreed-upon regular schedule, typically every week or bi-weekly.
  • Direct deposit. Employers must allow employees to receive their wages directly deposited into their bank accounts if the employee requests it.

Wage and Hour Complaints

  • Employee rights. Employees have the right to file a complaint with the DLT if they believe they have been subjected to wage and hour violations.
  • DLT investigations. The DLT will investigate complaints and take appropriate action, if necessary, to enforce wage and hour laws.

Compliance Best Practices for Employers

To ensure compliance with Rhode Island’s wage and hour laws, employers must adopt best practices that safeguard the rights and interests of their employees.

These practices include:

  • Stay updated. Firstly, regularly check the Rhode Island Department of Labor and Training (DLT) website to stay informed about the latest wage law changes.
  • Understand tipped and untipped workers. Secondly, distinguish between tipped and untipped workers, as the minimum wage for these categories differs. Ensure that tipped workers receive at least the minimum wage overall, including tips.
  • Maintain accurate payroll records. Thirdly, keep accurate records of all employee hours, wages, and deductions. You must maintain these records for at least three years.
  • Comply with overtime pay requirements. In addition, pay non-exempt employees overtime pay at a rate of time-and-a-half their regular hourly wage for all hours worked over 40 in a workweek. Part-time employees must also receive overtime pay if they work more than 40 hours in a workweek.
  • Adhere to deduction restrictions. Moreover, only deduct from employee wages for authorized reasons, such as taxes, insurance premiums, and employee-authorized payments. Ensure deductions are fair and transparent and inform employees in writing.
  • Provide wage and hour training. Furthermore, train supervisors and managers on wage and hour laws to ensure they can apply the regulations correctly.
  • Conduct Regular Wage Audits. Finally, regularly review payroll records, pay stubs, and deductions to identify potential compliance issues.

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How Factorial Can Help You Comply with Rhode Island’s Wage Laws

Factorial is a comprehensive HR platform that can help employers streamline and manage their payroll operations, automate tasks, and ensure compliance with Rhode Island’s wage laws.

Here’s how Factorial can help you adopt the above best practices and comply with RI’s wage laws:

  • Effortless payroll management. Firstly, Factorial’s robust payroll software simplifies wage calculations, pay period scheduling, and tax management.
  • Paid holidays made easy. Secondly, Factorial automates holiday pay calculations for PTO, including Rhode Island state holidays, ensuring employees receive their correct wages on time.
  • Data security and protection. Thirdly, Factorial prioritizes payroll security with multi-factor authentication, role-based access controls, and data encryption.
  • Overtime compliance. In addition, Factorial tracks employee hours and generates overtime reports. This helps businesses adhere to Rhode Island’s time-tracking legal requirements.
  • Electronic time clock for seamless tracking. Moreover, employees can clock in and out through the Factorial app from any device. This electronic time clock data seamlessly integrates with payroll.
  • Employee record management. Furthermore, Factorial’s employee record management software, which includes a customizable employee handbook, helps employers maintain complete employee records so that they can ensure compliance with recordkeeping requirements.
  • Legal requirements. Additionally, Factorial complies with employee consent, data accuracy, and privacy requirements for time tracking.
  • Rhode Island minimum wage compliance. Finally, Factorial calculates wages based on the current Rhode Island minimum wage rates, conducts compliance checks, and generates reports for tracking.

Ultimately, by using Factorial, employers can streamline their HR and payroll processes, automate repetitive tasks, and ensure compliance with Rhode Island’s wage laws, safeguarding their business and employees.

Cat Symonds is a freelance writer, editor, and translator. Originally from Wales, she studied Spanish and French at the University of Swansea before moving to Barcelona where she lived and worked for 12 years. She has since relocated back to Wales where she continues to build her business, working with clients in Spain and the UK.  Cat is the founder of The Content CAT: Content And Translation, providing content development and translation services to her clients. She specializes in corporate blogs, articles of interest, ghostwriting, and translation (SP/FR/CA into EN), collaborating with a range of companies from a variety of business sectors. She also offers services to a number of NGOs including Oxfam Intermón, UNICEF, and Corporate Excellence - Centre for Reputation Leadership.  For more information or to contact Cat visit her website ( or send her a message through LinkedIn.

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