Minimum wage increases hit January 1. Here's what local owners need to plan for.
At least 11 states raise their minimum wage on January 1, 2027, from 40 cents in Ohio to $1.27 in Michigan. What changes, where, and how owners are adjusting prices and schedules.
If you have hourly workers, January 1 is a payroll date, not just a holiday. At least 11 states have confirmed minimum wage increases for January 1, 2027, and several more are still announcing theirs. The federal minimum stays at $7.25, so in the 20 or so states that follow it, nothing changes.
Which states go up on January 1, 2027
| State | 2026 rate | 2027 rate | Raise |
|---|---|---|---|
| Washington | $17.13 | $17.73 | +$0.60 |
| Connecticut | $16.94 | $17.48 | +$0.54 |
| California | $16.90 | $17.40 | +$0.50 |
| Rhode Island | $16.00 | $17.00 | +$1.00 |
| New Jersey | $15.92 | $16.48 | +$0.56 |
| Colorado | $15.16 | $15.71 | +$0.55 |
| Maine | $15.10 | $15.70 | +$0.60 |
| Michigan | $13.73 | $15.00 | +$1.27 |
| Virginia | $12.77 | $13.75 | +$0.98 |
| Minnesota | $11.41 | $11.87 | +$0.46 |
| Ohio | $11.00 | $11.40 | +$0.40 |
Rates confirmed by each state as of early October 2026. Most of these states adjust every year for inflation. Connecticut’s 54-cent raise, for example, comes from a 3.2% rise in the federal employment cost index.
Still to be announced: Arizona, Vermont, Montana, South Dakota and Nebraska index their wages and typically announce in the fall. Not rising: New York stays at $17.00 in New York City, Long Island and Westchester and $16.00 elsewhere, and Missouri stays at $15.00 after a 2025 law repealed its inflation adjustment. Later in 2027: Alaska goes to $15.00 on July 1, and Oregon and Washington, D.C. adjust on July 1.
Cities and counties set their own floors too, and they are often higher. Flagstaff, Arizona rises to $18.95 on January 1, for example. Check your city as well as your state.
What it costs a small crew
Take a cleaning company in Michigan with five part-time cleaners at the minimum, each working 30 hours a week. The $1.27 raise adds about $9,900 a year in wages (5 workers × 30 hours × 52 weeks × $1.27). Employer Social Security and Medicare add another 7.65%, bringing the total to about $10,700 a year, before any raise you give people already above the minimum to keep pay gaps fair.
Restaurants should also check the tipped wage. Some states, like California, Washington and Minnesota, don’t allow a tip credit at all, so every server’s base rate rises with the minimum.
What owners are doing now
- Update payroll before the first pay period of 2027. If you run payroll through a provider like Gusto or QuickBooks Payroll, confirm the new state and local rates are loaded and that any employee at the old minimum is flagged.
- Re-price before January, not after. Customers accept a price change in December more easily than a surprise in February. Service businesses with recurring contracts should send notice now. Our cleaning pricing guide shows how labor flows into a per-visit price.
- Tighten schedules. Owners in the most recent NFIB survey say finding qualified workers, not labor cost, is the bigger problem. Cutting hours can cost you good people, so look at overtime and dead time between jobs first.
- Replace the posters. States require the current minimum wage poster at the worksite. Most labor departments post free downloads in December.
This article is general information, not legal or payroll advice. Rates can change; confirm with your state labor department.
Sources: U.S. Department of Labor, state minimum wage laws · Office of Gov. Ned Lamont (Connecticut), Aug. 5, 2026 · ADP state and local minimum wage chart, Sept. 20, 2026 · Economic Policy Institute minimum wage tracker · MakeMyPaystub 2027 increase roundup, Oct. 3, 2026