2026 Minimum Wage Increases: State-by-State Breakdown and How to Update Your Payroll Now
title: 2026 Minimum Wage Increases: State-by-State Breakdown and How to Update Your Payroll Now subtitle: With 19+ states raising rates on January 1, 2026—including big jumps in CA ($16.90), WA ($17.13), and NY (up to $17.00)—here's what multi-state employers need to know to stay compliant and avoid penalties. date: 2026-02-15 author: Payroll Beacon Team slug: 2026-minimum-wage-increases-state-by-state seo_keywords: 2026 minimum wage increases, state minimum wage 2026, minimum wage by state 2026, California minimum wage 2026, Washington minimum wage 2026, payroll update minimum wage featured_image: /images/minimum-wage-2026-header.jpg # Optional: path to uploaded image in Supabase Storage status: published
As of January 1, 2026, over 19 states implemented minimum wage hikes, affecting millions of workers and thousands of employers. For multi-state businesses, even small oversights can trigger back-pay demands, fines, or audits.
The federal minimum wage remains stuck at $7.25/hour (no change in 2026), so state and local laws dominate for most employers. Many states tie increases to inflation or CPI, leading to automatic annual adjustments.
This guide breaks down the key changes, provides a handy state-by-state table, and shares actionable steps to update your payroll systems—plus how tools like Payroll Beacon simplify tracking across your entire footprint.
Which States Increased Minimum Wages in 2026?
Here are the confirmed increases effective January 1, 2026 (unless otherwise noted):
| State | 2025 Rate | 2026 Rate | Increase | Notes / Tipped Rate (if different) | Source Link |
|---|---|---|---|---|---|
| Arizona | $14.70 | $15.15 | $0.45 | Tipped: $12.15 | AZ Dept of Labor |
| California | $16.50 | $16.90 | $0.40 | Statewide; higher for fast food ($20+), healthcare (phased up to $24+) | CA DIR |
| Colorado | $14.81 | $15.16 | $0.35 | Inflation-adjusted; local higher (e.g., Denver) | CO Dept of Labor |
| Connecticut | $16.35 | $16.94 | $0.59 | - | CT DOL |
| Hawaii | $14.00 | $16.00 | $2.00 | - | HI DLIR |
| Maine | $14.65 | $15.10 | $0.45 | Higher in Portland/etc. | ME DOL |
| Michigan | $12.48 | $13.73 | $1.25 | Tipped: $5.49 | MI LEO |
| Minnesota | $11.13 | $11.41 | $0.28 | Small/large employer tiers | MN DLI |
| Missouri | $13.75 | $15.00 | $1.25 | - | MO DLI |
| Montana | $10.55 | $10.85 | $0.30 | - | MT DLI |
| Nebraska | $13.50 | $15.00 | $1.50 | - | NE DOL |
| New Jersey | $15.49 | $15.92 | $0.43 | Higher for long-term care | NJ DOL |
| New York | $15.50 (upstate) | $16.00 (upstate); $17.00 (NYC/Long Island/Westchester) | $0.50–$1.00 | Regional variations | NY DOL |
| Ohio | $10.70 | $11.00 | $0.30 | Small business threshold changes | OH Commerce |
| Rhode Island | $15.00 | $16.00 | $1.00 | - | RI DLT |
| South Dakota | $11.20 | $11.85 | $0.65 | - | SD DOL |
| Vermont | $13.67 | $14.42 | $0.75 | - | VT DOL |
| Virginia | $12.41 | $12.77 | $0.36 | - | VA DOLI |
| Washington | $16.66 | $17.13 | $0.47 | Highest statewide; exempt salary jumps to ~$80k+ | WA L&I |
Key highlights:
- California: Statewide $16.90, but fast-food workers at $20+ and healthcare roles phased higher.
- Washington: $17.13—the highest base rate—with exempt salary thresholds now exceeding $80,000 in some cases.
- New York: Regional tiers—NYC and surrounding areas hit $17.00.
- Many states have local overrides (e.g., cities in CA, AZ, CO) that exceed the state minimum—always check your specific counties/cities.
Beyond the State Rate – Don't Forget Local Ordinances
Multi-state employers often miss city or county rules, which can carry steeper penalties than state-level fines. Examples include:
- Flagstaff, AZ: Up to $18.35 in some areas
- Various CA cities: $17+ in places like San Francisco or Los Angeles
- Chicago, IL: Ongoing adjustments
Use our state/local directory on PayrollBeacon.com to cross-check your locations.
Ripple Effects – Exempt Salary Thresholds and Overtime
In states that tie exempt status to multiples of the minimum wage (e.g., CA, NY, WA, CO, ME), salary thresholds rose significantly:
- California: Now ~$70,304/year for exempt employees (higher in some sectors)
- Washington: Often over $80,000 for certain exemptions
- Federal FLSA remains $684/week (~$35,568/year), but state rules prevail where higher.
Tip: Audit exempt employees in affected states and consider reclassification or salary adjustments if they're near the threshold.
How to Update Your Payroll – Step-by-Step Checklist
- Audit your workforce: Identify all employees in affected states and localities.
- Update pay rates: Apply new minimums in your payroll software before the effective date (retroactive if missed).
- Revise posters and notices: Most states require updated minimum wage posters—download fresh versions from state DOL sites.
- Review overtime, bonuses, and commissions: Ensure calculations reflect new bases.
- Train managers and HR: Communicate changes to avoid compliance slips.
- Monitor mid-year adjustments: Some states (e.g., AK, OR) adjust in July.
- Document everything: Keep records for potential audits or inquiries.
Download our free Minimum Wage Update Checklist to streamline this process.
Why Multi-State Compliance is Tough – And How Payroll Beacon Helps
Tracking 50+ states, hundreds of localities, and frequent changes is overwhelming. Payroll Beacon provides:
- Plain-English summaries and real-time law alerts
- Penalty calculators
- Centralized dashboard to compare your states in seconds
- Downloadable checklists and direct .gov source links
Sign up for a free trial today and see how we simplify 2026 compliance updates.
These 2026 increases are already in effect—act now to avoid costly errors. Check your locations in our state directory, download resources, or start a trial at PayrollBeacon.com.
Have questions about a specific state? Drop a comment below—we're here to help!