Last reviewed: November 9, 2026. We'll update this page as laws and rules change.
In 2027, most labor law changes for employers come from the states. Sixteen states raise their minimum wage on January 1, Connecticut extends paid sick leave to every employer, Maryland starts collecting paid family and medical leave contributions, and Virginia's paid sick leave law takes effect July 1. At the federal level, the minimum wage stays at $7.25 and the overtime salary threshold stays at $684 a week, but employers face new Form W-2 reporting for overtime and tips, a higher minimum wage on some federal contracts, and a pending independent contractor rule. This guide summarizes each change, gives the date it takes effect, and points to the page with the details.
Table of Contents
- 2027 Labor Law Changes by Date
- Federal Changes
- State Minimum Wage Changes
- State Paid Leave and Sick Leave Changes
- State Hiring Law Changes
- What These Changes Mean for Your Posters
- What to Do Before January 1, 2027
- FAQ
2027 Labor Law Changes by Date
| Date | Change | Who it affects |
|---|---|---|
| January 1, 2027 | Minimum wage increases in 16 states | Employers in Arizona, California, Colorado, Connecticut, Maine, Michigan, Minnesota, Montana, Nebraska, New Jersey, Ohio, Rhode Island, South Dakota, Vermont, Virginia and Washington |
| January 1, 2027 | Higher exempt salary floors in California, Washington and Maine | Employers with salaried exempt employees in those states |
| January 1, 2027 | Connecticut paid sick leave covers employers with one or more employees | Connecticut employers not already covered |
| January 1, 2027 | Maryland FAMLI contributions begin | Maryland employers |
| January 1, 2027 | Illinois paid jury duty | Illinois employers with more than 25 employees |
| January 1, 2027 | Washington Fair Chance Act amendments reach smaller employers | Washington employers with fewer than 15 employees |
| January 6, 2027 | Federal contract minimum wage rises to $14.05 | Contractors on contracts still covered by Executive Order 13658 |
| Early 2027 | New Form W-2 reporting of overtime and tips (for 2026 wages) | All employers that paid FLSA overtime or reported cash tips in 2026 |
| July 1, 2027 | Alaska minimum wage rises to $15.00; Oregon and District of Columbia adjust (amounts pending) | Employers in those jurisdictions |
| July 1, 2027 | Virginia paid sick leave takes effect, phased in by employer size | Virginia employers |
| Pending | Revised EEOC "Know Your Rights" poster | Employers with 15 or more employees |
| Pending | Federal independent contractor final rule | Employers that use independent contractors |
Federal Changes
Minimum Wage
The federal minimum wage stays at $7.25 per hour, where it has been since July 24, 2009. No increase is scheduled for 2027. Where federal, state and local rates differ, employers pay the highest rate that applies.
Federal Contractors
The minimum wage for workers on contracts still covered by Executive Order 13658 rises to $14.05 per hour, and the tipped cash wage to $9.85, on January 6, 2027. These are mainly Davis-Bacon Act and Service Contract Act contracts awarded between January 1, 2015, and January 29, 2022, and not renewed or extended since. Executive Order 14026, which set a higher rate for newer contracts, was revoked on March 14, 2025.
Separately, Executive Order 11246 was revoked in January 2025, and the rule rescinding its affirmative action regulations took effect October 26, 2026.
Overtime
The federal salary threshold for the white-collar overtime exemptions is $684 per week ($35,568 a year), and $107,432 for highly compensated employees. The Department of Labor's final rule restoring these levels took effect May 15, 2026, after courts vacated the 2024 increases. Several states set higher floors for 2027, including California ($72,384 a year) and Washington. For the state thresholds and daily overtime rules, see Understanding 2027 Overtime Laws: Practical Guidance for Employers.
Form W-2 Reporting for Overtime and Tips
The 2025 tax law (Public Law 119-21) created federal income tax deductions for employees: up to $12,500 a year ($25,000 on a joint return) for qualified overtime pay, and up to $25,000 for qualified tips, for tax years 2025 through 2028. For 2026 wages, the Forms W-2 that employers issue in early 2027 must report these amounts separately:
- Box 12, code TT: total qualified overtime compensation, meaning the premium ("half") portion of overtime paid under the Fair Labor Standards Act.
- Box 12, code TP: total cash tips reported to the employer.
- Box 14b: the Treasury Tipped Occupation Code for tipped employees.
Employers still withhold federal income tax on overtime and tips as before. Payroll systems should be set up now to track the overtime premium separately from regular pay.
Independent Contractor Rule
The Department of Labor proposed a new independent contractor rule in February 2026 and sent the final version to the White House for review on September 28, 2026. As of November 9, it has not been published in the Federal Register. Until it is, the 2024 rule remains the regulation in effect for private lawsuits, though the Department has not enforced it since May 2025. State tests, including the ABC test in California, Massachusetts and New Jersey, apply regardless. See Independent Contractor vs. Employee: 2027 Worker Classification Rules Employers Must Know.
Joint Employer Rule
The Department of Labor published a proposed joint employer rule under the Fair Labor Standards Act, the Family and Medical Leave Act and the Migrant and Seasonal Agricultural Worker Protection Act on April 23, 2026. It is a proposal only and does not change current obligations.
State Minimum Wage Changes
Sixteen states raise their minimum wage on January 1, 2027. Washington's rate of $17.73 is the highest among the states. Alaska rises to $15.00 on July 1, 2027, and Oregon and the District of Columbia adjust on July 1 by amounts not yet announced. New York holds its rates on January 1 because an economic off-ramp in state law was triggered, though its home care aide rate rises. Florida stays at $15.00 through December 31, 2027.
For each state's 2027 rate, tipped and youth rates, and which states have published their 2027 minimum wage posters, see 2027 State Minimum Wage Changes and Poster Updates.
State Paid Leave and Sick Leave Changes
- Connecticut: paid sick leave covers employers with one or more employees from January 1, 2027, completing the phase-in under Public Act 24-8. Newly covered employers take on the law's notice requirements, including the state's paid sick leave poster.
- Maryland: contributions to the Family and Medical Leave Insurance (FAMLI) program begin January 1, 2027. Employers must notify employees before deductions begin. Benefits begin in January 2028.
- Virginia: paid sick leave takes effect July 1, 2027, phased in by employer size. Employers must post a notice of employee rights; the Department of Labor and Industry will issue regulations setting the notice and posting requirements.
- Illinois: employers with more than 25 employees must pay employees for time spent on jury duty, starting January 1, 2027.
For each state's 2027 paid leave and sick leave changes, including paid family and medical leave contribution rates and benefit maximums, see Paid Leave and Sick Leave Changes for 2027 by State.
State Hiring Law Changes
Washington: the amended Fair Chance Act, which limits when and how employers may ask about criminal history, took effect July 1, 2026, for employers with 15 or more employees and applies to employers with fewer than 15 employees from January 1, 2027.
For the other 2027 hiring changes, including AI rules in Colorado, California and Connecticut, Illinois limits on driver's license requirements and Delaware's pay range requirement, see Hiring, Pay Transparency and AI Laws Taking Effect in 2027.
What These Changes Mean for Your Posters
Most of these changes come with new or revised workplace notices. A minimum wage increase usually means a new state minimum wage poster, and new leave laws such as Connecticut's and Virginia's carry their own posting requirements. States typically release 2027 posters between October and December, and employers should post the new versions before the change takes effect.
Federal EEOC poster: The current "Know Your Rights: Workplace Discrimination is Illegal" poster is dated June 27, 2023, and employers with 15 or more employees should keep displaying it. A revision is expected (the EEOC has flagged some of its documents for revision under a January 2025 executive order), but no revised poster or release date has been announced.
For each state's 2027 poster updates and what our state posters cover, see State Labor Law Poster Requirements: 2027 State-by-State Changes (A–Z). For which federal and state posters every employer must display, see our Complete Guide to Federal and State Labor Law Poster Requirements.
What to Do Before January 1, 2027
- Update pay rates for every state and city where you have employees, including tipped, youth and training rates.
- Check exempt salaries against the 2027 state floors in California, Washington and Maine, and plan for Alaska's July 1 increase.
- Set up W-2 reporting for the overtime premium (code TT), cash tips (code TP) and tipped occupation codes (box 14b).
- Review leave policies in Connecticut and Maryland now, and in Virginia before July 1.
- Review contractor relationships against your state's test, and watch for the federal final rule.
- Replace state posters as each state releases its 2027 versions, and keep the federal poster current.
FAQ
Is the federal minimum wage going up in 2027?
No. It stays at $7.25 per hour. The separate minimum wage for workers on contracts covered by Executive Order 13658 rises to $14.05 on January 6, 2027.
Did the federal overtime salary threshold change?
No change is scheduled for 2027. The threshold is $684 per week, restored by a Department of Labor rule effective May 15, 2026. Some states set higher thresholds.
What do employers have to report for "no tax on overtime" and "no tax on tips"?
On 2026 Forms W-2, employers report qualified overtime in box 12 with code TT, cash tips reported to the employer in box 12 with code TP, and the Treasury Tipped Occupation Code in box 14b. Employees use these amounts to claim the deductions.
Which states have new paid leave or sick leave laws in 2027?
Connecticut's paid sick leave reaches all employers on January 1, Maryland's FAMLI contributions begin January 1, and Virginia's paid sick leave takes effect July 1. Illinois requires paid jury duty from employers with more than 25 employees starting January 1.
Do I need new labor law posters for 2027?
If you have employees in a state that changes its minimum wage or adds a new notice, usually yes. Post each new state poster before the change takes effect.
Is the federal EEOC poster changing?
A revision is expected but has not been issued, and no release date has been announced. Until the EEOC issues one, the current version, dated June 27, 2023, is the one to display.
Get the Right Posters
National Safety Compliance offers labor law poster sets for every state, each with a state poster and a federal poster, and a labor law poster subscription that sends replacement posters when mandatory changes occur. Our Most Recent Changes page lists the latest updates.
Sources: U.S. Department of Labor, Wage and Hour Division; Federal Register (91 FR 64403, October 8, 2026; FR Doc 2026-09839, May 15, 2026; Joint Employer Status proposed rule, April 23, 2026; 91 FR 54444, August 21, 2026); IRS, 2026 General Instructions for Forms W-2 and W-3; U.S. Equal Employment Opportunity Commission, "Know Your Rights" poster page and FAQ; state labor agencies and statutes, including Connecticut Public Act 24-8, Maryland Department of Labor (FAMLI), Virginia 2026 Acts of Assembly, chapter 1128, Illinois Public Act 104-0683 and the Washington Attorney General's Office.