Summary:

 House Bill 522 (HB 522) provides an annual cost-of-living increase to the state minimum wage rate beginning in 2026; provides that certain tipped employees receive an hourly rate that is twenty-five percent of the prevailing hourly minimum wage rate plus tips; requires that public contracts provide for increased contractor and subcontractor reimbursement and worker wage increases in accordance with and concurrent with state minimum wage increases; and adds a definition of "consumer price index" to the Minimum Wage Act.  

Legislation Overview:

 House Bill 522 (HB 522) enacts a new section of the Minimum Wage Act with the following information and mandates: 

A. Beginning July 1, 2025, a state agency that contracts for services must include in the terms of that contract: (1) a provision for increasing reimbursement so the contractor and any subcontractor to that contract are held harmless for any wage increase resulting from an increase in the state minimum wage; and (2) a requirement that individuals employed according to that contract or a subcontract who are paid the state minimum wage must receive wage increases in accordance with and concurrent with increases in the state minimum wage.
 
B. As used in this section: (1) "contract" means any agreement for the procurement of services; (2) "services" means the furnishing of labor, time or effort by a contractor or subcontractor not involving the delivery of a specific end product other than reports and other materials that are merely incidental to the required performance; and (3) "subcontract" means a contract subordinate to another superordinate (higher level) contract, which is to procure services under the terms of the superordinate contract." 

C. Definitions are provided for “consumer price index,” “employer,”  and “employee.” 

Section 50-4-22 NMSA 1978 is amended to state that:

Except as provided in Subsection C of this section, an employer must pay an employee a minimum wage rate of at least twelve dollars ($12.00) an hour. As of January 1, 2026 and on January 1 of each successive year, the minimum wage rate is to be increased by the increase in the cost of living as provided in Subsection E of this section. 

An employee who customarily and regularly receives more than thirty dollars ($30.00) a month in tips shall be paid a minimum hourly wage that is twenty-five percent of the prevailing hourly minimum wage rate at the time the hours were worked, provided that the employer may consider tips as part of wages, but the tips combined with the employer's cash wage may not equal less than the minimum wage rate as provided in Subsection A of this section.

On January 1, 2026 and on January 1 of each successive year, the minimum wage rate must be increased by the increase in the cost of living. The increase in the cost of living is to be adjusted by multiplying the minimum wage as of January 1, 2025 by a fraction, the numerator of which is the consumer price index ending in September of the previous year and the denominator of which is the consumer price index ending in September 2024, with the amount of the minimum wage rate increase rounded to the nearest multiple of five cents ($.05), provided that the minimum wage rate may not exceed one hundred four percent of the minimum wage in the prior year and may not decrease from the minimum wage in the prior year. 

By November 1, 2025 and by November 1 of each successive year, the Workforce Solutions Department must publish on its website or otherwise notify employers of the minimum wage for the following year.





 

Current Law:

 The proposed mandates regarding minimum wages and minimum wage increases are not in place. The Minimum Wage Act does not include a definition of "consumer price index."