Oregon workers earning the minimum wage will get a pay raise of more than 4% on Monday, the third in a series of six rate hikes Oregon lawmakers approved in 2016.

The minimum wage will rise by 50 cents an hour, statewide. Employers must pay at least $12.50 in the Portland area, while lower rates apply in other parts of the state.

Employers have spent the past few years adapting to the steady increases. Lacey Partipilo, a director at Portland human resources services firm Xenium, said many have made a number of creative adjustments.

“Because this is something that’s been on everybody’s radar for several years, folks have had time to do some adjusting,” Partipilo said. “But there is still a financial impact.”

Relatively few workers make the minimum wage — about 162,000, according to the Oregon Employment Department, 7.3% of all jobs statewide. But the rising wage floor can push workers at the bottom of the pay scale close to rates more experienced or skilled colleagues earn.

That can trigger expensive, cascading wage hikes across a company’s workforce. Partipilo said Xenium’s clients are thinking creatively, offering alternatives to raises to retain workers earning more than the minimum.

For example, she said, companies might offer flexible work schedules or allow employees to do some jobs from home. Some are offering to repay student loans, offer a menu of benefits or other perks, dangle sabbaticals for long-time employees or help with student loan repayments.

“What this is causing employers do to is look at their compensation philosophy,” Partipilo said.

That’s what Charlene Wesler did at Gigi’s Cafe in Southwest Portland. In 2017, as the first of the new minimum wage hikes was about to kick in, Wesler did away with tips and instead instituted a 20 percent surcharge on meals at Gigi’s.

Gigi’s splits that surcharge among servers and kitchen staff. Wesler said the restaurant on Southwest Capitol Highway now pays about $18 an hour, plus some benefits and profit sharing based on employee longevity.

That’s helped her retain workers, Wesler said, and insulated Gigi’s from the steady drumbeat of minimum wage increases.

“For me the minimum wage increase is not a big deal because I’ve already kind of dealt with it,” she said.

The new minimum wage in the three-county Portland area equates to $26,000 annualized. The Legislature’s 2016 bill mandates continued increases until 2022, when the hourly minimum around Portland will hit $14.75. It will probably continue rising in subsequent years, with increases indexed to inflation.

Legislators set lower rates for urban and nonurban counties outside the Portland metro in acknowledgment of lower costs of living. The minimum wage in places including Lane and Benton counties rises to $11.25 on Monday, and to $11 an hour in such rural counties as Grant, Harney and Malheur.

The minimum wage hike was hotly contested in 2016, with business groups including the Oregon Restaurant and Lodging Association warning it would hurt job growth, force government agencies to scale back and squeeze small businesses.

The state’s largest business association, Oregon Business & Industry, said Thursday the rising minimum wage is one of several factors putting pressure on its members. Other factors include mandatory sick time, a pay equity law and restrictions on overtime.

“The weight of all of that is heavy for employers to bear, particularly when they are competing with businesses operating in other states that haven’t implemented these rules,” the association said in a statement.

The minimum wage in the Portland area will be among the highest in the nation: It’s $14 an hour in Washington, D.C., $12 in Massachusetts and Washington state, $11.10 in Colorado and New York, and $11 an hour in Arizona, California and Maine.

Seven states will require a $15 minimum wage by 2025 or earlier. Oregon is likely to hit that mark in the Portland area, at least, with future inflation adjustments.

In Seattle, large companies with at least 500 workers worldwide must pay $16 an hour and smaller employers must pay $15 an hour. Those smaller employers can pay a lower rate, as low as $12 an hour, provided they contribute to their employees’ health care or employees earn at least $3 an hour in tips.

Economists generally believe higher minimum wages benefit workers at the bottom of the wage scale but do contribute to job losses — or slower job gains — as businesses reduce employment to offset the higher wages.

The size of that effect is hotly debated, though. In Oregon, the jobless rate has remained near a historic low below 4.5% for the past 31 months even as the higher minimum wages took effect.

The national minimum wage of $7.25 hasn’t risen in a decade — the longest stretch in history. The new minimum in the Portland area will be 1.7 times higher than the federal requirement.

-- Mike Rogoway | twitter: @rogoway | 503-294-7699