(WBIR) The University of Tennessee announced Tuesday its plans to raise the minimum starting pay rate to $9 an hour on Jan. 1, 2014.

The minimum starting pay is currently $8.50 an hour. UT officials wrote in a statement that they hope to raise this rate to $9.50 an hour by June 30, 2014.

They said UT campuses and institutes are reallocating existing funds to cover initial costs associated with the increase, which is estimated to cost about $273,000. The increase will impact about 223 employees across the state.

"We're committed as a University System to offer competitive compensation to our diverse and dedicated workforce," UT President Joe DiPietro said in a statement. "With the help of our Compensation Advisory Board, we're making steady progress toward our compensation goals, especially those affecting positions at the lower pay grades, despite limited resources."