Minimum Wage Increases in 2026: What Multi-State Employers Should Know
Despite the federal minimum wage not having increased since July 24, 2009, many states and municipalities have passed laws protecting their workers. This allows local governments to address the economic realities of their communities, raising wages and providing other benefits to keep pace with the cost of living.
What Is the Minimum Wage?
The federal Fair Labor Standards Act of 1938 (FLSA) was the first federal legislation to set a minimum wage, establish a 44-hour workweek (and regulate overtime pay), and prohibit most child labor. It applies to most U.S. workers. Over the years, Congress has amended the FLSA multiple times, adding exemptions and expansions to address changing societal and workplace needs. The federal government provides official fact sheets and guidelines to help workers and employers understand and implement the current law.
The minimum federal hourly wage is currently $7.25. If a state or local law requires a higher hourly minimum, employers must pay covered workers that higher rate. However, if a state or local law sets a lower minimum (such as Georgia’s $5.15 per hour), employers must pay the federal minimum to all employees covered by the FLSA.
Thirty states and the District of Columbia have minimum wage requirements that exceed the FLSA. A total of 66 cities and counties, including San Francisco, Tucson, Denver, Chicago, and New York City, have passed minimum wage laws that exceed their state requirements. Many of these local laws also provide benefits for covered employees, such as mandatory sick leave (for example, Michigan’s Earned Sick Time Act).
Changes to Michigan Minimum Wage Laws in 2026
While Michigan follows the FLSA in many respects, it has its own minimum wage rules. The Improved Workforce Opportunity Wage Act applies to employees who work in Michigan for employers with two or more employees who are 16 years of age or older. Its most recent changes took effect on January 1, 2026. It currently provides:
- Hourly minimum wage. Michigan’s minimum wage is $13.73 per hour, and the tipped minimum wage is $5.49 per hour (40% of the standard minimum wage).
- Minors. The minimum hourly rate for workers aged 16 to 17 increased to $11.67 per hour, which is 85% of the standard minimum.
- New hires. Newly hired employees under 20 years old may be paid $4.25 per hour for the first 90 calendar days of employment.
Michigan’s hourly minimum wage is scheduled to increase through 2031. The tipped wage will gradually increase in proportion to the standard minimum wage until 2031, rising to 50% of the standard minimum hourly wage.
Changes to Minimum Wage Laws Across the U.S. in 2026
In 2026, increases in the minimum wage will take effect in 23 states and 66 local jurisdictions. Many of these took effect on January 1, but others begin at other times during the year.
For employers with employees in multiple states, keeping track of these laws can be challenging. Employees are generally protected by the laws of the state and locality where they physically work, including their minimum wage, overtime, and leave requirements. Some state and local benefits and protections take effect immediately, which could inadvertently entitle an employee to higher wages or other benefits even if they only work there temporarily.
Some states and localities, including California and many of its cities, automatically increase the minimum wage to keep pace with inflation. They use the local Consumer Price Index (CPI) to adjust wages to the cost of living. When inflation goes up, wages increase, helping ensure workers can afford to live near their jobs.
In other states, lawmakers must pass individual legislation to raise the minimum wage statewide. The following table summarizes the changes to state minimum wages from 2025 to 2026. Many localities within these states also implemented changes to their minimum wage rates; some representative metro areas are included, but many others across the country have also implemented changes.
| State | 2026 Minimum Wage (effective 1/1/26 except as noted) | 2025 Minimum Wage |
| Alaska | $14.00 (effective July 1, 2026) | $13.00 |
| Arizona | $15.15 | $14.70 |
| California | $16.90 (Local minimum wage chart) | $16.50 |
| Colorado | $15.16 (Denver $19.29) | $14.81 (Denver $18.81) |
| Connecticut | $16.94 | $16.35 |
| Florida | $15.00 (effective Sept. 30, 2026) | $14.00 |
| Hawaii | $16.00 | $14.00 |
| Maine | $15.10 | $14.65 |
| Michigan | $13.73 | $10.56 |
| Minnesota | $11.41 | $11.13 |
| Missouri | $15.00 | $13.75 |
| Montana | $10.85 | $10.55 |
| Nebraska | $15.00 | $13.50 |
| New Jersey | $15.92 | $15.49 |
| New York | $16.00 (New York City, Long Island, and Westchester $17.00) | $15.50 (New York City, Long Island, and Westchester $16.50) |
| Ohio | $11.00 | $10.70 |
| Oregon | $15.05 (non-urban $14.05; Portland metro $16.30) | $14.70 |
| Rhode Island | $16.00 | $15.00 |
| South Dakota | $11.85 | $11.50 |
| Vermont | $14.42 | $14.01 |
| Virginia | $12.77 | $12.41 |
| Washington | $17.13 | $16.66 |
| District of Columbia | $18.40 (Effective July 1) | $17.95 |
Some states and localities have different minimum wage requirements for different occupations, very small businesses, or seasonal employers. (For example, New York specifically regulates home healthcare aides and sets minimum wages based on the locations of their work.) These additional requirements can add another layer of complexity to payroll and tax calculations.
States With Higher Minimum Wages That Did Not Change in 2026
Eight states maintained higher minimum wages than the federal rate, but did not raise their minimum wages from 2025 to 2026.
These are:
| State | 2026 Minimum Wage (no change from 2025) |
| Arkansas | $11.00 |
| Delaware | $15.00 |
| Illinois | $15.00 (Chicago $16.60) |
| Maryland | $15.00 |
| Massachusetts | $15.00 |
| Nevada | $12.00 |
| New Mexico | $12.00 |
| West Virginia | $8.75 |
States With $7.25 Minimum Hourly Wages
The following twelve states have minimum wage laws that equal the federal rate of $7.25 per hour:
- Idaho
- Indiana
- Iowa
- Kansas
- Kentucky
- New Hampshire
- North Carolina
- North Dakota
- Pennsylvania
- Texas
- Utah
- Wisconsin
These five U.S. states have no statewide minimum-wage laws:
- Alabama
- Louisiana
- Mississippi
- South Carolina
- Tennessee
Employers must pay at least $7.25 per hour to workers in these states who are covered by the FLSA. There is no minimum for workers not covered by the FLSA.
Georgia and Wyoming have state laws providing a minimum wage of $5.15 per hour, and Oklahoma allows very small employers to pay a minimum wage of $2.00. These sub-minimum rates only apply to employees not covered by the FLSA.
Essential Actions for Multi-State Employers
Every multi-state employer must understand the laws that apply to every employee. Failing to follow state and local labor laws creates problems for both an organization and its employees. If your business has employees in multiple states, you must keep detailed payroll and tax records and ensure your workers know their rights. Conducting periodic payroll audits, updating labor posters, and reviewing salary thresholds can help employers stay compliant.
Employees who work in multiple states should ensure they understand the laws where they perform their work, including the required minimum wage and any other benefits. If your employer doesn’t comply with local and state minimum wage requirements and hasn’t paid you correctly, consult an experienced wage and hour attorney.
How To Recover Unpaid Wages or Benefits
Michigan employees may file complaints about improperly withheld or unpaid wages with the Michigan Wage and Hour Division. The state can impose legal and financial penalties on employers for violating state wage laws, including improperly administering tip pooling arrangements. If you earn wages outside of Michigan, you may need to contact the state or local labor board.
Michigan workers can also pursue a civil lawsuit to recover wages wrongfully withheld or unpaid, as well as to recover for other violations of Michigan and federal employment laws. If you suspect your employer is improperly calculating your pay or benefits, consult with an experienced attorney.
Contact Sommers Schwartz, P.C.
If you have questions about remote workers’ rights, managing compliance for workers in multiple states, unpaid or miscalculated wages, or other employment issues, contact Sommers Schwartz, P.C. Our experienced team of employment attorneys has decades of experience protecting Michigan workers’ rights and ensuring workers receive the pay they deserve. Contact us today to schedule a free, confidential, no-obligation consultation.
