SIOUX FALLS, S.D. (KELO) — The South Dakota minimum wage will increase by nearly a dollar starting in 2023.

The state announced Wednesday that beginning on January 1, 2023, the minimum wage will increase from $9.95 to $10.80 an hour. Hourly tipped employees will start at $5.40 an hour beginning next year.

The wage increase is a result of a 2016 law that requires an annual adjustment to reflect any increase to the cost of living as measured by the Consumer Price Index.