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Bill Summary · HB 246

HB 246 — Increase Minimum Wage (summary)

Status: Action postponed indefinitely (06/03/2025)
Introduced: January–February 2025 (first read Feb 11, 2025)
Primary sponsor(s): Rep. Patricia Roybal Caballero (and others)
Subject: Labor — minimum wage, employer/employee law

Main purpose

To raise New Mexico’s state minimum wage to $17.00 per hour (effective Jan 1, 2026), eliminate sub‑minimum/tipped wages and certain statutory exemptions, and require annual inflation indexing.

Key provisions

  • Sets a new statewide minimum wage of $17.00/hour beginning January 1, 2026.
  • Eliminates the tipped minimum wage and tip‑credits — employers must pay tipped employees at least the statutory minimum (no reliance on tip credits).
  • Requires annual adjustment of the minimum wage using the Consumer Price Index (CPI‑U) (CPI measured for the 12‑month period ending Sept. 30 each year).
    • LFC projected example wages: 2026 $17.00; 2027 $17.37; 2028 $17.69; 2029 $18.08; 2030 $18.49.
  • Repeals several statutory exemptions from the definition of “employee,” removing the special treatment for groups such as federal/state employees, employees of educational/charitable/religious organizations, registered apprentices, seasonal employees, and (initially) certain agricultural workers.
    • A committee amendment (House Labor, Veterans & Military Affairs) struck agricultural workers from the list targeted for removal — i.e., the amendment preserves the agricultural exclusion.
  • Removes the Workforce Solutions Department’s authority to issue special certificates permitting employers to pay workers with disabilities less than the statutory minimum (eliminating an existing subminimum‑wage mechanism subject to program conditions).
  • Expands the statutory definition of “employer” in some draft language to include the state and political subdivisions for minimum‑wage purposes (affecting public employers).

Who would be affected

  • Low‑wage workers in New Mexico paid below $17/hour, including many private‑sector employees and some state/local employees.
  • Tipped workers (who would receive at least the full minimum).
  • Employers statewide — small businesses, large employers, and public employers (state agencies and local governments where exemptions are repealed).
  • Workforce programs that pay minimum wage (e.g., senior employment programs) and workers with disabilities formerly paid subminimum wages under certificates.

Fiscal and operational impacts

  • State personnel impacts: State agencies reported dozens to several hundred employees would require pay increases; LFC estimated state employee wage costs rising (examples: ~$674k FY26 and ~$1.7M FY27 in direct costs to state payrolls, with potential further compaction adjustments).
  • Program impacts: Aging & Long‑Term Services estimated increased costs for its Senior Employment Program (~$122k first year). The Health Care Authority and LFC noted possible effects on Medicaid and other means‑tested program eligibility (“cliff” effects) and potential changes in program enrollment and state/federal costs; LFC presented large but model‑dependent estimates.
  • Revenue: LFC projected minimal but indeterminate additional state revenue from higher wages (personal income, corporate taxes, gross receipts).
  • Overall fiscal effects were described as indeterminate in the LFC report and sensitive to behavioral responses (employment, hours, program participation).

Timeline / effective dates

  • Minimum wage set to take effect January 1, 2026.
  • CPI indexing would begin after initial increase and change the statutory floor annually.
  • The bill contained no special effective‑date provision for other sections; normal statutory default timing would apply where relevant.

Procedural notes

  • Reported favorably in committee with amendment(s) but later the measure was placed "indefinitely postponed" (06/03/2025).
  • Related/companion measures and multiple state bills with the same number in other jurisdictions appear in the legislative file; this summary focuses on the New Mexico minimum‑wage version reflected in committee and LFC analysis.

If you want, I can:
- Extract and present the LFC/fiscal tables (state and program line‑item impacts) in a clearer format, or
- Prepare a short comparison showing how this proposal compares with current federal and New Mexico minimum wages and with common indexing approaches.

Compiled from official sources — confirm details with the bill’s official record.

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