Starting January 1, 2027, at least 15 states raise their minimum wage, while the federal floor holds at $7.25 an hour, a rate that has not moved since July 24, 2009. Washington sets the highest statewide rate at $17.73, up 3.5%, followed by Connecticut at $17.48 and California at $17.40. Michigan delivers the sharpest single-step increase: a 9.25% jump to $15.00, touching an estimated 527,000 jobs. If you earn at or near today's minimum, the numbers below tell you what lands in your account, what it costs your employer, and what is still not settled for 2027.

1. The new minimum wage rates from January 1, 2027

Most 2027 increases are automatic. States that index their rates to inflation recalculate them every year, which is why so many rises cluster between 3% and 4%. The Department of Labor (DOL) notes that several states run scheduled annual adjustments under different formulas, and most of them take effect on or around January 1.

• Washington: $17.73, up 3.5% from $17.13. Washington State's Department of Labor and Industries (L&I) announced the figure on September 30, 2026, using the federal Bureau of Labor Statistics (BLS) Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), comparing August 2025 to August 2026.
• Connecticut: $17.48, up from $16.94, the fourth annual adjustment tied to the federal Employment Cost Index for wages and salaries.
• California: $17.40 for all employers, certified by the state's Finance Director on July 31, 2026, after consumer prices rose 2.99% over the prior twelve months. Under California Labor Code section 1182.12, the increase is capped at the smaller of 3.5% or the measured CPI change.
• Rhode Island: $17.00, up from $16.00, a step written into state law signed by Governor Dan McKee.
• New Jersey: $16.48 for most employees, up $0.56, set under Article 1, Paragraph 23, of the New Jersey Constitution and announced September 29, 2026, by the New Jersey Department of Labor and Workforce Development.
• Colorado: $15.71, up 3.6% from $15.16 and 41.5% above the 2019 level of $11.10, announced August 13, 2026, by the Colorado Department of Labor and Employment (CDLE).
• Maine: $15.70, up from $15.10, after Northeast CPI-W rose 4.1% between August 2025 and August 2026.
• Arizona: $15.65, up 50 cents from $15.15, after August-to-August CPI inflation of 3.4% under the Proposition 206 indexation formula.
• Michigan: $15.00, up 9.25% from $13.73, set in statute and signed by Governor Gretchen Whitmer on February 21, 2025. From 2027 onward, the rate rises with inflation every year.
• Virginia: $13.75, up from $12.77, under HB1/SB1 signed by Governor Abigail Spanberger in April 2026, which also schedules $15.00 for January 1, 2028.

Minnesota adjusts for inflation on January 1 as well, reaching $11.87 an hour for all employers, a 3.99% increase announced August 19, 2026, by the Department of Labor and Industry. Ohio, South Dakota, Montana, and Nebraska have also announced 2027 increases. Nebraska's rise is capped at 1.75% under state law (LB 258), which puts it at $15.26, about 29 cents below what the voter-approved 2022 indexation formula would have produced.

Cities add another layer. Seattle rises from $21.30 to $22.14 on January 1, 2027, tracking the Seattle-Tacoma-Bellevue CPI. Denver's local minimum reaches $19.84. A third-party count by Business Tax Deadlines, cited by Newsweek, lists 102 minimum wage changes across 20 states and 74 cities, counties, and local jurisdictions for 2027, with 73 of them taking effect on January 1. Under the Fair Labor Standards Act (FLSA), the rule is clear: employers pay whichever minimum is highest, whether federal, state, or local.

The New York exception

New York does not move on January 1. One of the off-ramp conditions in its law was met, blocking the inflation increase, so the rate stays at $17.00 in New York City, Long Island, and Westchester, and $16.00 in the rest of the state, per the New York State Department of Labor.

Governor Hochul has proposed changing the off-ramp so the increase would apply from March 1, 2027: $17.60 downstate and $16.55 elsewhere. That requires the State Legislature's approval, so both outcomes remain possible. A full-time worker in New York City earns $35,360 gross a year at $17.00. If the proposal passes, the new rate adds about $1,040 in gross pay over the remaining ten months of 2027; if it fails, pay stays flat all year. New York home care aides do receive a raise on January 1, 2027, reaching $20.00 an hour in New York City, Long Island, and Westchester and $19.00 elsewhere.

2. Seventeen years at $7.25: how the federal floor got stuck

The federal minimum wage started at $0.25 an hour on October 24, 1938. It reached $3.35 on January 1, 1981, $4.25 in April 1991, $4.75 in October 1996, and $5.15 on September 1, 1997. Three more steps followed: $5.85 in July 2007, $6.55 in July 2008, and $7.25 on July 24, 2009.

By October 2026, that last rate has sat untouched for more than 17 years, the longest gap in the DOL's recorded history. The previous longest stretches were about 9 years and 3 months (1981 to 1990) and about 9 years and 11 months (1997 to 2007). There is no automatic adjustment: as Ohio's Department of Commerce notes, any change to the federal rate requires an act of Congress and the President's signature.

According to the DOL's consolidated minimum wage table, last revised July 1, 2026, 30 states plus Washington DC set minimums above $7.25, 13 states match it exactly, and 7 states have no minimum wage law or one below the federal rate. That last group includes Georgia and Wyoming, both still at a state rate of $5.15, though employers covered by the FLSA must pay $7.25. States with no minimum wage law at all include Alabama, Louisiana, Mississippi, South Carolina, and Tennessee; FLSA coverage still requires $7.25 in those states.

According to BLS data for 2024, only about 842,000 hourly-paid workers, roughly 1.0% of the 80.3 million hourly-paid workforce, earned at or below the federal $7.25. That share is well down from 13.4% in 1979, reflecting how many states have moved above the federal floor over the decades. Workers under 25 are one-fifth of all hourly-paid workers but account for 43% of those at or below $7.25, and part-time workers reach the federal minimum or below at a 2.4% rate, four times the rate for full-time workers.

3. From gross to net: what the change means for your paycheck and the employer's bill

Take a full-time worker logging 40 hours a week, or 2,080 hours a year. At $7.25, that is $15,080 gross. After the employee's share of Social Security and Medicare taxes under FICA (6.2% Social Security plus 1.45% Medicare, totaling 7.65% per IRS Topic 751), take-home pay is about $13,926 before any state or local tax. At that income level, the 2026 federal standard deduction of $16,100 for single filers eliminates federal income tax entirely.

At Washington's 2027 rate of $17.73, the same hours produce $36,878 gross. A single worker keeps about $31,812 after federal income tax and FICA, roughly $1,003 more a year than at the 2026 rate of $17.13 (about $30,809 net). These figures use 2026 federal tax parameters under IRS Revenue Procedure 2025-32 and exclude state and local deductions.

Employers pay more than the gross wage. Adding the employer's matching FICA and the federal unemployment tax (FUTA, 0.6% on the first $7,000 of wages after the standard state tax credit per IRS Circular E), a full-time worker costs about $16,276 a year at $7.25 and about $39,742 at Washington's 2027 rate, before state payroll taxes such as unemployment insurance. Washington's increase adds roughly $1,343 a year for each full-time minimum-wage employee.

Michigan shows what a legislated step costs. At $15.00, 2,080 hours come to $31,200 gross, up $2,642 from $28,558 at $13.73. For a small business with ten full-time staff on the minimum, that is more than $26,000 in extra gross wages before payroll taxes.

Connecticut Labor Commissioner Danté Bartolomeo put his state's increase in weekly terms:

"This is a $21.60 increase per week for workers that are working 40 hours. It's a 3.2% increase that will help mitigate the costs of inflation, keep wage gaps from widening and promote a steady, stable economy."

If you earn at or near the minimum, start from the gross salary on your pay stub and calculate your net after the change, rather than relying on the headline hourly figure. Deductions, hours, and local taxes determine what actually reaches your account. Tipped workers may also benefit from a separate federal deduction: effective 2025 through 2028, employees in occupations that customarily receive tips may deduct up to $25,000 a year in qualified tips from federal income tax, phasing out above $150,000 of modified adjusted gross income, per current IRS guidance.

4. Special rules: tipped workers, young workers, contractors, and sector minimums

Tipped workers. Under FLSA Section 3(m)(2)(A), employers may pay tipped employees who receive more than $30 a month in tips a cash wage of $2.13 an hour and claim a tip credit of up to $5.12, as long as the combined total reaches $7.25. Seven states ban that credit and require the full state minimum before tips: Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington.

Where tip credits survive, some cash wages still move in 2027. Colorado's tipped minimum becomes $12.69 and Maine's rises from $7.55 to $7.85. In New York City, Long Island, and Westchester, tipped service employees receive a cash wage of $14.15 and tipped food service workers $11.35 from January 1; the rest of the state gets $13.30 and $10.70. Michigan's tipped cash wage, listed at $5.49 in the DOL's July 2026 table, is scheduled to rise every year until it reaches 50% of the state minimum in 2031.

Young workers. Federal law permits $4.25 an hour for employees under 20 during their first 90 consecutive calendar days with an employer. Washington lets employers pay 14- and 15-year-olds 85% of the minimum, which is $15.07 in 2027. Large Washington employers with 51 or more employees must also meet a higher overtime-exempt salary threshold: starting January 1, 2027, the multiplier rises to 2.5 times the minimum, setting the annual floor at $92,196.

Federal contractors. Since May 11, 2026, the Executive Order 13658 minimum is $13.65 an hour ($9.55 for tipped staff) and applies mainly to older Davis-Bacon Act and Service Contract Act contracts entered between January 1, 2015, and January 29, 2022, that were not subsequently renewed. The higher $15.00 contractor minimum under Executive Order 14026 no longer applies: President Trump revoked it on March 14, 2025, via Executive Order 14236, and the DOL stopped enforcing it and its implementing rule at 29 CFR part 23.

Sector minimums. California's covered fast-food restaurant workers under Labor Code sections 1474-1476 retain a $20.00 an hour minimum. New York home care aides rise to $20.00 downstate and $19.00 elsewhere on January 1, 2027. New Jersey's agricultural workers reach $15.00 for the first time, up from $14.20. Salary floors for overtime-exempt staff also shift: California's rises to $72,384 a year (from $70,304), and for Washington employers with 51 or more staff the threshold reaches $92,196.

If you work in hospitality, retail, or care, compare salaries across your region for your specific job title before assuming the legal minimum is the going rate. The BLS 2024 data show that leisure and hospitality had the highest share of hourly workers at or below the federal minimum at 5.6%, employing about two-thirds of all such workers, almost entirely in restaurants and food services. In many cities, the market already pays above the statutory floor.

5. A two-speed labor market: compression, hiring, and your next move

Floors that rise 3% to 9% in some states while staying frozen in 20 others push employers in different directions. In leisure and hospitality, retail, and part-time hiring, the new minimum quickly becomes the advertised starting rate. The harder question comes one rung up: when Michigan's entry wage jumps 9.25%, the gap to shift leads and entry-level supervisors shrinks unless their pay rises too. That pattern, known as wage compression, either pushes up the whole pay band or leaves experienced staff earning barely more than new hires.

The political debate reflects that tension directly. Nebraska state senator Kathleen Kauth, who chairs the Legislature's Business and Labor Committee, argued that a mandated increase delivers only a false sense of security for about six months before costs catch up. Fellow senator Danielle Conrad countered that the additional pay is real money for hundreds of thousands of minimum-wage workers. Virginia Governor Abigail Spanberger, signing the state's two-step increase into law, put it plainly: if you work full time in Virginia, you should be able to afford to live there.

For employees, the practical question is whether the raise actually reaches you. If you earn just above the new minimum, compare your salary with what others in the same role earn locally. Compression often means the person hired next month starts on almost what you make after months or years in the role.

If you live near a state line, the pay gap can make a commute or a move worth running the numbers on. The spread between the $7.25 floor that still binds in Texas and Pennsylvania and Washington's $17.73 is more than $10.48 an hour, or roughly $21,800 a year in gross pay for a full-time worker. Update your resume with the shifts, certifications, and responsibilities you already carry, and look at open roles in neighboring states where the floor is higher.

At a job interview, ask directly whether the hourly rate on offer already includes the January 1 increase, and whether pay for experienced staff moves when the minimum does. That second answer tells you a great deal about how the employer handles salary conversations going forward.

What is still open for 2027

Several pieces remain in motion. New York's proposed March 1, 2027, increase depends on the State Legislature. On July 1, a second wave arrives: Alaska moves to $15.00 under Ballot Measure 1, while Oregon and Washington DC apply their annual inflation adjustments. Florida holds at $15.00 until its next CPI-W calculation on September 30, 2027, with the adjusted rate taking effect January 1, 2028. Virginia reaches $15.00 on January 1, 2028, under the same statute that sets the 2027 rate.

Nebraska's 1.75% annual cap under LB 258 stays in place, and the Omaha court fight over a local cost-of-living ordinance is not yet final; a Douglas County judge allowed part of the Omaha ordinance to take effect on October 1, 2026, but blocked the section eliminating the lower youth wage, and Lincoln's ordinance remains enjoined. As Omaha City Council President Danny Begley put it, economic conditions in Omaha are simply not comparable to smaller Nebraska towns.

At the federal level, nothing is law. Senators Josh Hawley (R-Mo.) and Peter Welch (D-Vt.) introduced the Higher Wages for American Workers Act in June 2025, which would set the nationwide minimum to $15.00 and then index it to inflation. Senator Hawley has said working people haven't gotten a raise in years and need one. Senator Welch argues that $7.25 an hour doesn't come close to what a living wage requires. Senator Ron Johnson (R-Wis.) counters that raising the cost of an entry-level job leads to fewer entry-level jobs, noting that the real minimum wage is zero when someone can't find work at all. Separately, House Education and Workforce Democrats back the Raise the Wage Act of 2025, which would lift the federal floor to $17.00 by 2030 and index it to median wage growth, with sponsors estimating about 22 million workers would receive a raise. Both bills need Congress and the President to advance. Until that changes, the next set of adjustments will come from the states, starting with the July 1 round.

Before your first January payslip, run your new hourly rate through a salary calculator to check your monthly take-home. If you run a payroll, budget for the full employer cost per worker, including FICA, FUTA, and any applicable state premiums, not just the gross wage.