Last updated: November 15, 2026. This article is for general information only and is not legal, payroll or tax advice. Minimum wage rules have exceptions by employer size, industry, age and location, and some 2027 local rates were still unpublished when this was written. Confirm the rate that applies to you with your state labor department, your city or county, or a qualified employment attorney or payroll provider.
At least 16 states will raise their minimum wage on January 1, 2027, and dozens of cities and counties will follow on the same day. The biggest jump is in Michigan, which goes from $13.73 to $15.00 an hour. Washington keeps the highest statewide rate at $17.73, and Seattle moves to $22.14. The federal minimum wage stays at $7.25, where it has been since 2009.
Below you will find every state increase scheduled for January 1, 2027, the states that change later in the year, key city rates, tipped wage changes, and a short checklist for small employers who need to update payroll before the first pay period of the new year.
State minimum wage increases on January 1, 2027
The 2026 rates come from the U.S. Department of Labor’s state minimum wage table. The 2027 rates come from state announcements as compiled by ADP, Experian Employer Services and minimumwagerates.com, cross-checked against each other. Where the sources disagreed or only one source listed a rate, we say so.
| State | 2026 rate | Jan. 1, 2027 rate | Increase | How it is set |
|---|---|---|---|---|
| Arizona | $15.15 | $15.65 | +$0.50 | Annual inflation adjustment |
| California | $16.90 | $17.40 | +$0.50 | Annual inflation adjustment |
| Colorado | $15.16 | $15.71 | +$0.55 | Annual inflation adjustment |
| Connecticut | $16.94 | $17.48 | +$0.54 | Annual adjustment tied to employment cost index |
| Maine | $15.10 | $15.70 | +$0.60 | Annual inflation adjustment |
| Michigan | $13.73 | $15.00 | +$1.27 | Scheduled step set by state law |
| Minnesota | $11.41 | $11.87 | +$0.46 | Annual inflation adjustment |
| Montana | $10.85 | $11.20 | +$0.35 | Annual inflation adjustment |
| Nebraska | $15.00 | $15.26 | +$0.26 | Annual inflation adjustment begins |
| New Jersey | $15.92 | $16.48 (most employers) | +$0.56 | Annual inflation adjustment |
| Ohio | $11.00 | $11.40 (larger employers) | +$0.40 | Annual inflation adjustment |
| Rhode Island | $16.00 | $17.00 | +$1.00 | Scheduled step set by state law |
| South Dakota | $11.85 | $12.30 | +$0.45 | Annual inflation adjustment |
| Vermont | $14.42 | $14.91 | +$0.49 | Annual inflation adjustment (capped at 5%) |
| Virginia | $12.77 | $13.75 | +$0.98 | Scheduled step set by state law |
| Washington | $17.13 | $17.73 | +$0.60 | Annual inflation adjustment |
A few details matter for specific employers:
- New Jersey: seasonal employers and employers with fewer than six employees have a lower rate of $16.25, according to ADP and Experian.
- Ohio: the $11.40 rate applies to non-tipped workers at employers above the state’s gross receipts threshold. Smaller employers and workers under 16 stay at the federal $7.25.
- Virginia: minimumwagerates.com lists a further step to $15.00 on January 1, 2028.
- Montana: a separate $4.00 rate still applies to certain small businesses not covered by the federal Fair Labor Standards Act (FLSA), per the Department of Labor. In practice, most Montana employers pay the state rate or the federal rate, whichever is higher.
- California: the $17.40 rate is the statewide floor. Many California cities set higher local rates, and some industries have their own minimums, so check local rules too. Experian reports the state’s minimum salary for exempt employees rises to $72,384 a year in 2027.
- Vermont: the Valley News reported on November 10, 2026 that the Vermont Department of Labor confirmed the $14.91 rate, a 3.4% increase based on the consumer price index.
States with no change on January 1, 2027
New York is a notable state with no January raise. The rate stays at $17.00 in New York City, Long Island and Westchester and $16.00 in the rest of the state, according to ADP and minimumwagerates.com. Home care aides in New York must be paid at least $3 above the applicable minimum.
About 20 states either have no state minimum wage or use the federal $7.25 rate, including Texas, Georgia, Tennessee, Pennsylvania, North Carolina and Indiana, according to the Department of Labor table. Employers there still must follow any higher local rules where cities are allowed to set them.
Minimum wage changes later in 2027
| State | Current rate | Next change | Status |
|---|---|---|---|
| Alaska | $14.00 | $15.00 on July 1, 2027 | Set by law (2024 ballot measure) |
| Oregon | $15.55 standard ($16.80 Portland metro, $14.55 non-urban) | July 1, 2027 | Inflation-indexed; amount not yet published |
| District of Columbia | $18.40 | July 1, 2027 | Inflation-indexed; amount not yet published |
| Florida | $15.00 (since Sept. 30, 2026) | Sept. 30, 2027 | First annual inflation adjustment; amount not yet published |
Florida reached $15.00 an hour on September 30, 2026, the final step of the schedule voters approved in 2020. Under that amendment, future increases are tied to inflation. Sources disagree on the exact timing of Florida’s next change, so watch for the official notice from the state.
City and county minimum wages for 2027
Local rates are often much higher than state rates. These are some of the most widely reported changes for January 1, 2027:
| City or county | 2026 rate | 2027 rate |
|---|---|---|
| Seattle, WA | $21.30 | $22.14 |
| Denver, CO | $19.29 | $19.84 |
| Boulder, CO | $16.82 | $18.17 |
| Minneapolis, MN | $16.37 | $17.02 |
| Saint Paul, MN (101+ employees) | $16.37 | $17.02 |
| Santa Fe, NM | $15.40 | $17.50 |
| Portland, ME | $16.75 | $17.75 |
| San Diego, CA | — | $18.35 |
| West Hollywood, CA (non-hotel) | — | $20.94 |
| Santa Clara and Palo Alto, CA | — | $19.25 |
Smaller Saint Paul employers (6 to 100 employees) reach $17.02 on July 1, 2027, and micro businesses (5 or fewer) move from $14.25 to $15.00 on the same date. Many other cities and counties, including Los Angeles, Chicago, Cook County, San Francisco, Berkeley, Montgomery County (MD) and Prince George’s County (MD), adjust on July 1, 2027, and most had not published amounts as of mid-November 2026. Some smaller California and Washington cities had not finalized January rates either, so check your city’s labor standards office before you set pay.
Tipped minimum wage changes for 2027
The federal tipped cash wage remains $2.13 an hour, with tips required to bring total pay up to at least $7.25. States that raise their regular rate often raise the tipped rate too:
- Michigan: $5.49 to $6.30 (Experian)
- Maine: $7.55 to $7.85 for service employees (Experian)
- Vermont: $7.21 to $7.46, half the regular rate (Valley News)
- Ohio: $5.50 to $5.70 (Experian)
- Colorado: $12.69 cash wage (Experian)
- New Jersey: minimum cash wage of $6.61 (ADP)
California, Minnesota, Montana, Nevada, Oregon and Washington do not allow a tip credit, so tipped workers there must receive the full state minimum before tips, according to ADP.
What a minimum wage increase costs a small business
The raise itself is only part of the cost. Payroll taxes rise with wages, and many employers also lift pay for workers just above the minimum to keep the gap between new hires and experienced staff. Here is a simple example using Michigan’s $1.27 increase:
| Item | Calculation | Annual cost per worker |
|---|---|---|
| Wage increase, full-time (2,080 hours) | $1.27 × 2,080 | $2,641.60 |
| Employer Social Security and Medicare (7.65%) | $2,641.60 × 0.0765 | $202.08 |
| Total before state unemployment and workers’ comp | about $2,844 |
For a shop with five full-time minimum wage employees, that is roughly $14,200 more per year before any raises for other staff. For a part-time worker at 20 hours a week, the wage increase alone is about $1,320 a year. These are illustrations; your real cost depends on hours, overtime, state unemployment rates and benefits.
If you are bringing on extra help for the holidays, our seasonal employee payroll checklist covers the W-4, I-9 and Form 941 steps that go along with setting the right wage.
Employer checklist before January 1, 2027
- Find every rate that applies. Check the federal, state, county and city rate for each work location and pay the highest one. Remote employees are generally covered by the rules where they work, not where your business is based.
- Update payroll before the first pay period that includes January 1. Hours worked on or after January 1 must be paid at the new rate, even if the pay period started in December.
- Review tipped employees. Update the cash wage and the tip credit amount, and confirm tips plus cash wage meet the new minimum for each workweek.
- Check exempt salaries. In states that tie the exempt salary threshold to the minimum wage, such as California, salaried employees may need a raise to stay exempt from overtime.
- Replace your workplace posters. Most states require an updated minimum wage poster. Download it from your state labor department rather than buying from a third party.
- Look at pay compression. Decide whether workers earning slightly above the new minimum also get an increase.
- Update prices and budgets. Small, planned price changes are easier for customers to accept than a sudden jump later in the year.
- Keep records. Save time records and pay records showing that the new rate was applied from the correct date.
Year-end is also when many owners decide on holiday bonuses. If you plan to pay one, see how employee holiday bonuses and gifts are taxed so the net amount your staff receives matches what you intended.
What this means for workers
If you earn the minimum wage, check your first January paycheck. A full-time worker in Michigan should see about $50.80 more per 40-hour week before taxes, and a full-time worker in Washington about $24.00 more. If your pay did not change and you believe you are covered, ask your employer or contact your state labor department. For a broader look at why these increases matter for prices and jobs, read how wages shape the economy.
A higher paycheck is also a good moment to revisit savings. Even small automatic contributions add up, and the 2027 401(k) and IRA contribution limits show how much you can put away with tax advantages next year.
Frequently asked questions
Which state has the highest minimum wage in 2027?
Washington, at $17.73 an hour from January 1, 2027. The District of Columbia is higher at $18.40, but it is not a state. Several cities, led by Seattle at $22.14, are higher still.
Is the federal minimum wage going up in 2027?
No. The federal minimum wage remains $7.25 an hour, and no increase had been enacted as of November 2026. It applies where a state has no minimum wage or a lower one.
Which state has the biggest increase in 2027?
Michigan, with a $1.27 raise to $15.00 on January 1, 2027. Rhode Island is next at $1.00, followed by Virginia at $0.98.
Do I have to pay the city rate or the state rate?
You must pay whichever rate is highest for the place where the employee works: federal, state, county or city.
When does the new rate start?
For January increases, the new rate applies to all hours worked on or after January 1, 2027. If a pay period includes both December and January days, hours worked in January are paid at the new rate.
Bottom line
At least 16 states raise their minimum wage on January 1, 2027, with Michigan’s jump to $15.00 the largest and Washington’s $17.73 the highest. Alaska, Oregon, DC and Florida follow later in the year, and many cities have their own higher rates. Employers should confirm every rate that applies, update payroll and posters before the first January pay period, and budget for payroll taxes on top of the raise.
Sources
- U.S. Department of Labor, Wage and Hour Division: State Minimum Wage Laws (updated July 1, 2026)
- ADP: 60+ Minimum Wage Increases Set for January 1, 2027 (Nov. 9, 2026)
- Experian Employer Services: 2027 State-by-State and Local Minimum Wage Changes (Oct. 9, 2026)
- Minimumwagerates.com: Minimum wage increases 2027 (updated Oct. 28, 2026)
- Valley News: Vermont to raise minimum wage $0.49 in January (Nov. 10, 2026)
- Lowndes: Florida’s Minimum Wage Reaches $15.00 on September 30, 2026
