Minimum Wage Changes in 2026

By Clinton Anderson|Jan 8, 2026|1:26 pm CST

Minimum wage in 2026 isn’t a single number you update once a year.

It’s ongoing, local, and uneven, and for multi-location restaurant operators, that complexity adds up quickly. Some states are now well above $15 per hour. Others continue to follow the federal minimum of $7.25. On top of that, cities and counties increasingly set their own rates.

In Fourth’s 2025 end-of-year restaurant compliance webinar, labor and employment attorney Christopher Bentley put it simply: wage and hour rules are changing rapidly at the state and city level. Most compliance issues aren’t intentional. Missed updates or applying rules in the wrong place are the most common issues.

This post is designed to help operators stay oriented as 2026 unfolds. You’ll find:

• A 2026 minimum wage chart by state
• An overview of how wage changes affect restaurants beyond hourly pay
• A practical checklist for keeping wage updates from slipping through the cracks

2026 Minimum Wage by State (Effective January 1, 2026)

Starting this month (January 2026), the following states implemented minimum wage increases: Arizona, California, Colorado, Connecticut, Hawaii, Maine, Michigan, Minnesota, Missouri, Montana, Nebraska, New Jersey, New York, Ohio, Rhode Island, South Dakota, Vermont, Virginia, and Washington.

For operators with locations in any of these states, the new rates apply immediately and should be reflected in payroll, scheduling, and labor planning. For operators elsewhere, these changes are still worth noting. State-level increases often spread to nearby states and cities, especially as more states move toward $15 per hour or higher.

The table below summarizes state minimum wages in effect as of January 1, 2026, using the U.S. Department of Labor’s consolidated minimum wage data.

Note that many jurisdictions have city or county minimum wages that exceed the state rate. When there are multiple rates that could be applied, employers are required to pay the highest rate.

Some states say “varies” because in certain states, minimum wage depends on employer size, revenue, or location within the state. When that’s the case, we’ve shown the possible rates and summarized the rules below.

• New York: $17.00 per hour in New York City, Long Island, and Westchester County; $16.00 per hour in the rest of the state.
• Oregon: Regional minimum wages based on geography: $16.30 (Portland metro), $15.05 (standard counties), and $14.05 (non-urban counties).
• New Jersey: Minimum wage varies by employer size and business type, with different rates for large employers, small employers, seasonal businesses, and certain other categories.
• Ohio: Employers above a state-defined revenue threshold must pay $11.00 per hour; smaller employers may pay the federal minimum wage of $7.25.

What Restaurant Operators Should Watch in 2026 (Beyond the Hourly Rate)

When minimum wage goes up, it doesn’t stay on paper. Restaurants feel it right away, in a few predictable ways.

1) Tipped wages and tip credit require closer attention

Tipped wage rules get harder to manage as minimum wages rise, especially because states can set stricter standards than federal law.

As wage floors increase:

• Tip credit calculations may change by state or city
• The line between tipped and non-tipped work matters more
• Documentation becomes more important to reflect how work actually gets done

For operators with locations in multiple states, tipped wage rules are rarely one-size-fits-all. Reviewing them market by market helps avoid confusion later.

2) Overtime costs increase automatically

Overtime is calculated based on an employee’s regular rate of pay, so when base wages go up, overtime rates rise with them.

Overtime issues are often uncovered after the fact, not because hours weren’t tracked, but because higher rates made small scheduling issues more visible. Reviewing overtime exposure regularly (not just at payroll close) helps operators stay ahead of that curve.

3) Scheduling decisions carry more cost impact

Higher minimum wages make everyday scheduling mistakes more expensive:

• Overstaffing slower shifts
• Making late schedule changes
• Relying on outdated forecasts
• Inconsistent practices across locations

With higher wages scheduling decisions play a bigger role in labor cost control. Connecting forecasts, schedules, and wage rules helps operators see how changes affect the business before the money is spent.

Local Minimum Wage: Where Complexity Adds Up

One of the most common questions operators ask is: “What is the minimum wage in my city in 2026?”

That’s because many cities and counties set minimum wages above the state level. California is a well-known example: while the statewide minimum is $16.90, cities like Los Angeles and West Hollywood require higher rates.

For multi-unit operators, the challenge isn’t awareness, it’s scale. Tracking local changes manually across locations can be time-consuming, and small gaps are easy to miss without having one place to see everything.

A Practical 2026 Wage-Readiness Checklist

To keep wage updates manageable as 2026 continues, many operators focus on a few repeatable steps:

• Confirm pay rates by location (state and city/county) before the first payroll of the year.
• Review tipped wage settings to ensure tip credits and role eligibility align with local rules.
• Monitor overtime trends regularly, especially in higher-wage markets.
• Compare written policies to actual practices in stores.
• Train managers on the why, not just the rule. Most issues stem from inconsistency, not intent.
• Centralize labor and scheduling data to spot differences across locations early.

Bottom Line

Minimum wage changes in 2026 aren’t just a payroll task, they’re part of the part of the day-to-day reality of running a restaurant.

Operators who handle these changes smoothly tend to focus less on memorizing rules and more on building simple, repeatable processes that keep wage updates visible and consistent across locations.

That approach doesn’t just support compliance, it makes labor planning clearer, scheduling decisions more informed, and operations easier to manage as wage rules continue to evolve.

Frequently Asked Questions