For a broader look at changes affecting employers beyond wages, see our complete guide to 2026 updates.
Stay ahead of rising labor costs and avoid compliance pitfalls by understanding the 2026 minimum wage increases in each state. Whether you're managing payroll for a single location or overseeing operations in multiple states, 2026 is shaping up to be one of the most active years for wage law changes in recent memory.
Why 2026 Is a Big Year for Wage Changes
- Inflation adjustments & indexing: Many states tie their wage floor to cost-of-living indexes (CPI, CPI‑W, Employment Cost Index), meaning consistent upward pressures.
- Ballot initiatives & public mandates: Voters in several states have approved or are considering wage hikes or mandates to take effect in 2026.
- Legislation in process: Some state legislatures are pushing new minimum wage bills, tipped wage reforms, or removal of automatic indexing.
- Employer risk and budgeting: Missed increases or mis‑applied rules can lead to fines, back pay liability, and unexpected labor cost overruns.
To help you prepare, we break down confirmed 2026 changes first, then proposals to watch, and finally what you should do now. The links below are for the current 2025 State & Federal Labor Law Posters, if you purchase now, be sure to choose our Poster Subscription to ensure you automatically receive updated posters next year. Pre-orders for updated 2026 Labor Law Posters will begin soon.
Confirmed 2026 Minimum Wage Increases (and Related Rules)
Here are states with wage changes already locked in or effectively scheduled for 2026:
Arizona
- Rising from $14.70 to $15.15/hr, effective January 1, 2026
California
- Non-exempt (hourly) rate: $16.90/hr as of January 1, 2026
- Exempt salary threshold: $70,304/year (twice the new minimum, per state rule)
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Note: Some sectors (fast food, healthcare) already operate at higher wages
Colorado
- Increasing from $14.81 to $15.15/ hr effective January 1, 2026
Connecticut
- Increasing from $16.35 to $16.94/ hr effective January 1, 2026
Hawaii
- Increasing from $ 14.00 to $16.00/ hr effective January 1, 2026
Washington
- Minimum wage: $17.13/hr starting Jan 1, 2026 (2.8% increase)
- Adjustment mechanism: Based on CPI‑W comparisons per state law
- Impact: Also likely raises the “exempt” salary floor tied to minimum wage
Maine
- Increasing from $14.65 to $15.10/ hr effective January 1, 2026
Michigan
- Projected rate: $13.73/hr in 2026
- Tipped wage changes: Tipped wage is to gradually rise until it reaches 50% of the full rate by 2031.
Minnesota
- New Minimum Wage: $11.41/hr
- Training Wage: $9.31/hr for workers under 20 during their first 90 days
Missouri
- New wage: $15.00/hr effective January 1, 2026, via Proposition A
- Indexing repeal: After 2026, annual inflation indexing will be removed via legislative action (HB 567), but the wage jump to $15 remains.
- Paid sick leave rollback: The paid sick leave mandate from Prop A has been repealed, effective August 28, 2025.
Nebraska
- Increasing from $13.50 to $15.00/hr effective January 1, 2026
New York
- Increasing from 15.50 to 16.00/ hr effective January 1, 2026
Virginia
- New wage: rising from $12.41 to $12.77/hr as of January 1, 2026
Some states including Montana, Ohio, South Dakota, Vermont, and Washington will see a minimum wage increase in 2026, but the final rate has not been announced.
Proposed or Under‑Consideration Wage Reforms
These states have active proposals, ballot measures, or legislative efforts that could affect 2026 wages or tipped wage rules:
- Massachusetts: Proposal (Question 5) to gradually eliminate tip credit and move tipped wage closer to full wage; 2026 could see a jump (around 73% of base) under this plan.
- New Jersey: AB 5433 proposes phasing out the tipped wage credit.
- Pennsylvania: House proposals to boost wage to $15 by 2026 are under consideration.
- New Hampshire: Proposals suggest raising to $12.50 in 2026 and $14 in 2027.
Because these are not yet law, outcomes remain uncertain but employers in those states should watch closely and consider building “what-if” models.
While understanding and complying with minimum wage laws is a critical part of labor compliance, it's important to remember that wage laws are just one component of a much broader legal framework. To ensure you're not missing key areas of compliance, learn how to conduct a comprehensive labor law compliance audit that covers far more than just wage-related regulations.
What Employers Should Do Now: Action Plan
If your organization operates in any of the states above (or is planning to), use the following checklist to get ahead of 2026:
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Update Payroll Systems & Rate Tables
- Enter the new confirmed wages and schedule TBD states pending updates
- Adjust for tipped wage rules or training wages as needed
- Test rounding, overtime pay, holiday pay, and edge cases under new wage levels
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Revise Employee Policies, Handbooks & Contracts
- Reflect new wages, any exempt salary thresholds, and compensation policies
- Provide clear written notices to employees if required by state law
- Review promotion, offer, and reclassification language
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Order / Update Labor Law Posters & Notices
- Acquire 2026-compliant posters in all relevant jurisdictions
- For states permitting digital posting (e.g., Ohio), plan hybrid or remote compliance
- Ensure posters are visible or accessible to all employees
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Budget & Forecast Labor Cost Impacts
- Estimate increased wage costs by role, state, department
- Assess whether pricing, staffing, or shift scheduling must adjust
- Build buffers for wage-related taxes, benefits, and payroll burden
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Monitor Legislative Changes & Finalized Rates
- Watch for official announcements in TBD states
- Track ballot measure results, especially in CA, MA, NH, NJ
- Reassess your projections quarterly as data becomes available
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Coordinate With Payroll/HR Vendors & Vendors
- Confirm vendor readiness and timing for wage changes
- Schedule software updates and test runs before January 2026
- Validate cutover timing and rollback plans
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Train HR, Payroll, and Management Teams
- Educate staff on new wage rules, tip credits, exempt thresholds
- Provide simple reference sheets or FAQs
- Perform internal audits or mock pay runs
Why 2026 Wage Compliance Is More Critical Than Ever
- Penalties & Back Pay: Failing to pay the correct wage can lead to governmental fines, back wage claims, or lawsuits.
- Reputational Damage: Wage violations are often public; they can erode employee trust and external brand perception.
- Tight Labor Market: With strong competition for talent, fair wage adherence is critical for retention and morale.
- Complex Multi-State Operations: For employers in multiple jurisdictions, managing a patchwork of wage rules, tipped wage policies, and indexing changes adds complexity and risk.
Key Takeaways for 2026 Wage Planning
2026 isn’t just another year for wage laws it’s a pivot point. With confirmed wage hikes, ballot-mandated schedules, and contentious legislative proposals, employers must act now to ensure payroll, compliance, and internal planning are ready.
As 2026 approaches, minimum wage increases across the U.S. will impact labor budgets, payroll systems, and compliance strategies for businesses of all sizes. From confirmed changes in states like California, Connecticut, and Michigan to proposed increases in New Jersey, Ohio, and others, staying ahead of these updates is essential to avoid fines, ensure compliance, and maintain operational efficiency.
Understanding differences between federal and state laws is essential for compliance. With wage laws rapidly evolving, taking proactive steps now will help your business stay compliant, competitive, and ready for a successful 2026.