Navigating Missouri 2025 payroll law updates can feel overwhelming, but we’re here to break down the latest updates so you can focus on what matters most — running your business. Let’s dive into what’s new for 2025 and how it impacts your team, budget, and compliance requirements.
Key Missouri 2025 Payroll Law Updates
Minimum Wage Increase
New Rate
- $13.75/hour (effective January 1, 2025), up from $12.30 in 2024.
2026 Preview
- Rises to $15.00/hour on January 1, 2026, with annual inflation adjustments afterward.
Exemptions
Retail/service businesses with annual gross sales under $500,000 and government entities.
Tipped Employee Rules
Base Pay
- Employers must pay tipped workers at least $6.875/hour, with tips required to bring total earnings to $13.75/hour.
Action Step
- Review tip-tracking systems to ensure employees meet the new threshold.
Paid Sick Leave Mandate
Accrual Starts May 1, 2025
- Employees earn 1 hour of paid sick leave for every 30 hours worked.
Annual Caps:
- Small businesses (<15 employees): 40 hours/year.
- Larger businesses (15+ employees): 56 hours/year.
Carryover
- Up to 80 unused hours can roll over, but annual usage cannot exceed the cap.
Compliance Deadlines
April 15, 2025
- Provide written notice to employees about paid sick leave rights and display state-approved posters.
May 1, 2025
- Begin accruing paid sick leave for all employees.
Why These Changes Matter for Your Business
Avoid Penalties
- Underpaying wages or misclassifying employees could lead to fines of up to $1,100 per violation.
Boost Retention
- 67% of Missouri workers support higher wages, which can improve employee satisfaction and reduce turnover.
Budget Planning
- The 2026 wage hike to $15/hour means proactive budgeting is critical for long-term stability.
Next Steps for Compliance
Update Payroll Systems
- Adjust software to reflect the $13.75/hour minimum wage and tipped employee rates.
Audit Employee Classifications
- Ensure exempt/non-exempt status aligns with updated thresholds.
Display Updated Posters
- Download and post the 2025 Missouri labor law notice in a visible area by April 15.
Review Paid Leave Policies
- Confirm existing PTO policies meet or exceed Proposition A’s sick leave requirements.
Legal Challenges: What to Know
A lawsuit filed by business groups argues Proposition A violates Missouri’s single-subject rule for ballot measures. However, the law remains in effect unless overturned, so compliance is mandatory for now.
Simplify Compliance with Expert Help
Payroll laws are complex, but you don’t have to tackle them alone. At A+ Payroll and Bookkeeping Services, LLC, we specialize in:
Accurate Wage Calculations
- Ensuring compliance with minimum wage and tipped employee rules.
Paid Leave Management
- Streamlining sick leave accruals and recordkeeping.
Tax Compliance
- Avoid costly errors in withholdings and filings.
👉 Schedule a Free Consultation
📞 Call Us Today at (636) 236-1701
Remember…
Staying ahead of these changes isn’t just about compliance — it’s about building a trustworthy, thriving business. Let’s make 2025 your smoothest year yet!
