Understanding the minimum wage by state in 2026 is essential for small business owners who want to stay compliant, budget accurately, and avoid payroll errors. While the federal minimum wage remains $7.25 per hour, many states and local governments have enacted higher wage laws, and several increases are already scheduled to take effect in 2026.
This matters even more if you operate in New York, where payroll rules vary by location and wages are set to rise again. Paying the wrong rate, even by a small amount, can lead to penalties, back pay, and compliance issues.
If you want payroll to stay accurate as wage laws change, a platform like FRIDAY helps you apply the correct rate automatically, track employee locations, and stay aligned with state requirements without manual updates. This guide breaks down the latest wage rules clearly so you know exactly what to pay and when.
Federal Minimum Wage vs State Minimum Wage
The Fair Labor Standards Act (FLSA) sets the current federal minimum wage at $7.25 per hour, a rate that has not changed since 2009. However, federal law allows states, cities, and counties to establish higher minimum wages.
When multiple wage laws apply, employers must pay the highest applicable minimum wage. That means if a state or local rate exceeds the federal rate, the higher amount controls.
As of late 2025, 34 states, territories, and the District of Columbia have minimum wages above the federal minimum. In contrast, several states either do not have a state minimum wage or set one lower than $7.25, which causes the federal rate to apply for most employees covered by the FLSA.
States Without a State Minimum Wage or Below the Federal Rate
Some states rely entirely on federal law to set the minimum wage. In these locations, most employees must still be paid $7.25 per hour under federal rules.
The following states do not have a state minimum wage law:
- Alabama
- Louisiana
- Mississippi
- South Carolina
- Tennessee
The following states have a statutory wage below $7.25, but default to the federal minimum for covered employees:
- Georgia
- Oklahoma
- Wyoming
For small business owners operating in these states, federal compliance is still required, and payroll systems must enforce the federal rate even when state law appears lower.
Minimum Wage by State (Effective Late 2025 With Enacted 2026 Increases)
The table below reflects state minimum wages in effect as of September 30, 2025, along with future enacted increases that are scheduled to take effect in 2026. This summary does not include industry-specific, tipped, or prevailing wage rules.
| State | Minimum Wage | Enacted 2026 Increase |
| Alaska | $11.91 | $13.00 |
| Arizona | $14.70 | Indexed annually |
| Arkansas | $11.00 | Indexed annually |
| California | $16.50 | Indexed annually |
| Colorado | $14.81 | Indexed annually |
| Connecticut | $16.35 | Indexed annually |
| Delaware | $15.00 | — |
| District of Columbia | $17.50 | $17.95 |
| Florida | $14.00 | $15.00 (9/30/26) |
| Hawaii | $14.00 | $16.00 (1/1/26) |
| Illinois | $15.00 | — |
| Maine | $14.65 | Indexed annually |
| Maryland | $15.00 | — |
| Massachusetts | $15.00 | Indexed to federal |
| Michigan | $10.56 | $13.29 (2/21/26) |
| Minnesota | $11.13 | Indexed annually |
| Missouri | $13.75 | Indexed annually |
| Montana | $10.55 | Indexed annually |
| Nebraska | $13.50 | $15.00 (1/1/26) |
| Nevada | $12.00 | — |
| New Jersey | $15.49 | Small employers: $15.00 |
| New Mexico | $12.00 | — |
| New York | $15.50 / $16.50 | Regional (see below) |
| Ohio | $10.70 | Indexed annually |
| Oregon | $14.70 | $15.05 |
| Rhode Island | $15.00 | — |
| South Dakota | $11.50 | Indexed annually |
| Vermont | $14.01 | Indexed annually |
| Virginia | $12.41 | Indexing begins Oct 2026 |
| Washington | $16.66 | Indexed annually |
| West Virginia | $8.75 | — |
States that index wages adjust rates annually based on inflation rather than fixed dollar increases. Employers should always verify the effective rate for the applicable year.
New York Minimum Wage and Payroll Rates for 2026
New York continues to have one of the most complex minimum wage structures in the country. Rates vary by geographic location, and scheduled increases take effect on January 1, 2026.
New York Minimum Wage by Region
| Location | 1/1/2025 | 1/1/2026 |
| New York City | $16.50 | $17.00 |
| Nassau, Suffolk, Westchester | $16.50 | $17.00 |
| Remainder of New York State | $15.50 | $16.00 |
These increases are enacted by law, not projections.
For employers running New York state payroll, this means employee location must be tracked accurately. A worker moving between regions or working remotely can trigger a different applicable minimum wage.
Using a payroll system like FRIDAY helps apply the correct New York rate automatically based on employee location, reducing manual errors and compliance risk.
Tipped Wages, Training Wages, and Exceptions
Minimum wage laws include several exceptions that employers must handle carefully.
Many states allow a lower tipped wage, provided tips bring the employee’s total pay up to the required minimum. If tips fall short, the employer must make up the difference.
Some states permit training or subminimum wages for limited periods, often for employees under a certain age. These rules are tightly regulated and vary by state.
Other exemptions may apply based on:
- Gross annual sales
- Number of employees
- Whether the worker is covered by the FLSA
Because these exceptions can change how payroll is calculated, accurate employee classification is essential.
Why Minimum Wage Compliance Is a Payroll Issue, Not Just an HR Issue
Minimum wage compliance affects more than hourly pay. It directly impacts:
- Overtime calculations
- Premium pay requirements
- Guaranteed monthly compensation thresholds
- Payroll tax reporting
When wages increase, employers must also ensure overtime rates, salary thresholds, and payroll records are updated correctly. Manual updates create risk, especially for businesses operating in multiple states.
A payroll platform built for small businesses, like FRIDAY, simplifies this by keeping wage rules current, applying changes automatically, and reducing the chance of costly mistakes.
Preparing for 2026 Minimum Wage Increases
With several states increasing wages in 2026, now is the time to prepare.
Before the new rates take effect:
- Review employee work locations
- Confirm which state and local wage laws apply
- Update payroll systems with new effective dates
- Communicate changes clearly to employees
Businesses that plan ahead avoid rushed updates and payroll errors when increases go live.
How FRIDAY Helps You Stay Compliant in 2026
How FRIDAY helps you stay compliant in 2026 starts with removing guesswork from payroll. As minimum wage laws continue to change across states and local governments, especially in places like New York, small businesses need a system that applies the correct rates automatically and keeps payroll aligned with current regulations.
FRIDAY is built specifically for small businesses that want payroll to stay accurate without constant manual updates. It applies the correct minimum wage by state, accounts for regional differences, and ensures overtime and pay calculations stay compliant as rates change.
If you’re preparing for 2026 wage increases, FRIDAY makes it easier to run payroll with confidence, stay compliant as laws evolve, and focus on growing your business instead of tracking legislative updates.
FAQs
What state has the lowest minimum wage?
Several states effectively have the lowest minimum wage at $7.25 per hour, which matches the federal minimum. These include Alabama, Louisiana, Mississippi, South Carolina, and Tennessee, which do not have state minimum wage laws, and states like Georgia and Wyoming that default to the federal rate.
Which US state has the lowest salary?
States that rely on the federal minimum wage generally have the lowest legally required hourly pay. In practice, this means employees covered by the FLSA must be paid at least $7.25 per hour, even if the state statute lists a lower amount.
Which states have the highest minimum wage?
The highest state-level minimum wages are found in places like Washington, California, and New York, with rates exceeding $16 per hour. Some local governments, such as parts of Washington state and California cities, require even higher pay.
Where in the US is the minimum wage $20?
No U.S. state has a statewide minimum wage of $20 per hour. However, some cities and local jurisdictions, particularly in Washington and California, have enacted local minimum wages that exceed $20 per hour.
Pincus Schiff is a payroll software specialist at Friday App, where he helps businesses simplify payroll, stay compliant, and automate their workflows. He writes about payroll best practices, compliance, and the latest in workforce technology.
