Rhode Island raised the state minimum wage from $15 to $16 per hour in a law that went into effect Jan. 1. The shift affects some 50,000 workers who earn minimum wage, according to a press release from the office of Gov. Dan McKee, who signed the legislation last August. The law, which went into effect Jan. 1, stipulates a further increase in the minimum wage to $17 per hour beginning Jan. 1, 2027.
Jan. 1, 2025 brought the completion of McKee’s previous minimum wage increase in a 2021 law he signed to raise the state’s minimum wage from $11.50 to $15 per hour over four years.
According to the Rhode Island Department of Labor and Training, R.I. employers can pay tipped workers less than minimum wage, but employees’ total earnings — including tips — must add up to at least the minimum wage. If their tips and wage don’t total to $16 per hour, employers must pay their workers the difference.
“My administration continues to prioritize raising incomes for all Rhode Islanders,” McKee wrote in an email to The Herald. To meet this priority, McKee and his administration plan on “strengthening workforce development and attracting companies that offer higher-paying jobs,” he added.
R.I. Director of Labor and Training Matthew Weldon said the R.I. DLT will enforce the new hourly wage by investigating employer payrolls, especially when workers submit complaints about insufficient compensation.
In the August press release, U.S. Rep. David Bennett (D-R.I. 20), a co-sponsor of the bill, wrote that the continuous increases in the minimum wage over the last few years have been aimed at offsetting “the rising cost of living, helping our working families support themselves and keeping us competitive with our neighboring states.”
Patrick Crowley, president of the Rhode Island branch of the American Federation of Labor and Congress of Industrial Organizations, told The Herald that for a full-time worker, a raise of a dollar an hour “is equivalent to a little bit more than $2,000 a year” — what he described as “a significant increase.”
Cortney Nicolato, president and CEO of United Way of Rhode Island, a nonprofit that aims to support Rhode Island residents in a variety of different ways, told The Herald that about 40% of Rhode Island families are asset-limited, income-constrained and employed.
United Way R.I. runs the Volunteer Income Tax Assistance program, an Internal Revenue Service program, in the state. Because of this, United Way R.I. has unique insight into the wages of Rhode Islanders, Ellijah McLean MA’24, United Way R.I.’s manager of government relations and policy, told The Herald. Based on what he’s seen, he asserted that “the minimum wage increase is going to be felt, but not drastically.”
In McLean’s view, “this wage increase still feels a little bit behind.” Today’s workers may not feel “that instant, immediate impact” that a $16 per hour minimum wage “would have felt like a few years ago,” he added.
Crowley pointed out that the new law puts Rhode Island’s minimum wage above Massachusetts’s $15 per hour, but it still falls below the $16.94 per hour minimum wage in Connecticut, where the state government accounts for inflation in their calculation of minimum wage.
Nicolato also pointed out that the consumer price index rose 2.7% in December. The rising costs of basic necessities are not “leveling to the wages,” she said.
Currently, “there is some discussion” about potential new legislation that would “tie minimum wage to” the consumer price index to “create a more predictable environment for workers and employers,” Weldon told The Herald
“Right now the department will analyze any bills that come in,” he added.
Although United Way R.I. and R.I. AFL-CIO representatives lauded the newly raised minimum wage, they stressed that there remains work to be done.
“Families are still struggling,” McLean said. He added that United Way R.I. plans to “work with legislative champions to identify additional pathways to increase household income.”
