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Nearly 20 states and more than 40 local jurisdictions in the U.S. will raise their minimum wage rates at the start of 2026, marking one of the largest coordinated increases in recent years, according to ADP.
Employers nationwide will need to prepare for new pay requirements, updated postings, and related compliance obligations.
Broad State-Level Increases Take Effect
On January 1, 2026, a wide range of states will see their hourly minimums rise. The updated rates include:
- Arizona: $15.15
- California: $16.90
- Colorado: $15.16
- Connecticut: $16.94
- Hawaii: $16.00
- Maine: $15.10
- Michigan: $13.73
- Minnesota: $11.41
- Missouri: $15.00
- Montana: $10.85
- Nebraska: $15.00
- New Jersey:
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- $15.92 (6+ employees)
- $15.23 (seasonal or <6 employees)
- $15.92 (6+ employees)
- New York:
- $17.00 (NYC, Long Island, Westchester)
- $16.00 (rest of state)
- $17.00 (NYC, Long Island, Westchester)
- Ohio: $11.00
- Rhode Island: $16.00
- South Dakota: $11.85
- Vermont: $14.42
- Virginia: $12.77
- Washington: $17.13
Tipped Workers Will See Increases Too, But Not Everywhere
Some states will raise tipped wage structures alongside the new minimums. In Hawaii, for instance, employers may apply a limited tip credit only when workers’ combined wages and tips reach the new statewide rate.
But several states — notably California, Minnesota, and Montana — continue to prohibit tip credits entirely, requiring tipped employees to receive the full minimum wage in direct pay.
A Complicated Patchwork for Multi-State and Remote Employers
For companies operating across jurisdictions, the highest applicable wage always wins out. This includes remote staff: workers typically fall under the wage rules of the location where they perform the work, not where their employer is based.
Differences in local ordinances, employer-size thresholds, and work-hour triggers further complicate compliance heading into 2026.
Ripple Effects on Workers Already Above the Minimum
Even employees already earning more than their state’s new minimum may feel the changes. Some organizations adjust pay scales upward to maintain internal equity or to manage morale after mandated increases compress wage bands.
While not required, such ripple adjustments often become part of annual compensation planning.
Compliance Will Require Updated Notices
Many jurisdictions mandate updated workplace postings when wage laws change. States like Minnesota also require written notice to employees before any pay change takes effect.
Employers will need to verify both state- and city-specific posting rules to remain compliant.
More Adjustments Arrive Midyear
The January increases represent only part of the 2026 wage picture. Additional changes will roll out on July 1, and Florida’s statewide rate will hit $15.00 on September 30, 2026, as part of its multi-year path to increased pay standards.
Overtime Exemption Thresholds Will Rise in Several States
In states where overtime exemptions are tied to the minimum wage — including California, Colorado, Maine, New York, and Washington — salary thresholds for exempt employees are also expected to rise in 2026.
Employers should anticipate further guidance as states finalize those figures.
