The federal minimum wage has been stuck at $7.25 per hour since July 24, 2009 — the longest stretch without a federal increase in US history. In practice, most American workers are covered by state or local minimums that are significantly higher. Here is every rate you need to know for 2026, plus the tip credit rules that trip up many employers.
The Federal Minimum Wage Floor: $7.25 Since 2009
The Fair Labor Standards Act (FLSA) sets the federal minimum wage at $7.25 per hour. This has not changed since the last increase took effect on July 24, 2009 — making 2026 the 17th consecutive year at the same rate. Federal law functions as a floor: states and localities can set higher minimums, but no covered employer can legally pay less than $7.25. Any business with at least $500,000 in annual revenue or engaged in interstate commerce is covered by the FLSA, which effectively means nearly every private employer in the country.
Six states have no state minimum wage law of their own: Alabama, Louisiana, Mississippi, South Carolina, Tennessee, and Wyoming. Employers in those states default to the federal $7.25 floor. Georgia and Wyoming technically have state minimums set below $7.25, but the FLSA preempts those lower rates for covered employers.
States With Higher Minimum Wages in 2026
As of mid-2026, the following states have minimum wages above the federal floor. Where states have scheduled increases tied to cost-of-living indexes, the rate shown reflects the current 2026 figure:
- California — $17.00/hr (fast-food and healthcare workers subject to separate, higher sector minimums)
- Washington — $16.28/hr (adjusted annually by CPI)
- New York — $16.00/hr statewide; $16.50/hr in New York City, Long Island, and Westchester County
- New Jersey — $15.49/hr (annual CPI adjustment)
- Massachusetts — $15.00/hr
- Colorado — $14.81/hr (annual CPI adjustment; effective Jan 1, 2026)
- Illinois — $14.00/hr (scheduled to reach $15.00 on Jan 1, 2025 for businesses with 4+ employees; verify current phase-in status)
- Maryland — $15.00/hr
- Connecticut — $16.35/hr (increased Jun 1, 2026)
- Oregon — $14.70/hr standard; $15.95/hr Portland Metro area; $13.70/hr non-urban counties
- Arizona — $14.70/hr (annual CPI adjustment)
- Nevada — $12.00/hr for all employees (no tip credit; single-tier minimum since July 2024)
- Florida — $14.00/hr (phased increases toward $15.00 by Sep 2026)
- Minnesota — $10.85/hr large employers; $8.85/hr small employers (under $500K annual revenue)
Tip Credit: The Rule Most Employers Get Wrong
Federal law permits employers to pay tipped employees a cash wage as low as $2.13 per hour — but only if tips bring the employee's total hourly rate to at least $7.25. If tips fall short in any workweek, the employer must make up the difference. This is called the "tip credit" and it equals up to $5.12/hr ($7.25 − $2.13).
Many states either prohibit the tip credit entirely or set a higher tipped minimum wage. The following states require employers to pay the full minimum wage to tipped workers, with no tip credit allowed:
- California — $17.00/hr regardless of tips received
- Washington — $16.28/hr regardless of tips
- Oregon — Full minimum wage; no tip credit
- Nevada — $12.00/hr; single minimum wage for all workers
- Alaska — $11.91/hr; no tip credit
- Montana — $10.55/hr; no tip credit
- Minnesota — No tip credit for large employers
Local Minimums: When the City Rate Exceeds the State
Many cities and counties have set minimum wages that exceed both the federal and state floors. If you operate in one of these jurisdictions, you must pay the highest applicable rate — federal, state, or local. Key 2026 local minimums include:
- Seattle, WA — $19.97/hr (large employers; annually adjusted by CPI)
- San Francisco, CA — $18.67/hr (adjusted annually on July 1)
- Denver, CO — $18.29/hr (adjusted annually)
- New York City, NY — $16.50/hr (above the $16.00 statewide rate)
- Los Angeles, CA — $17.28/hr for unincorporated county areas
- Chicago, IL — $16.20/hr (above the $14.00 state rate)
- Portland, OR — $15.95/hr metro area (above the $14.70 state rate)
State-by-State Minimum Wage Reference Table
The table below covers 18 key states with their regular minimum wage, tipped minimum wage, and compliance notes for 2026.
| State | Regular Min Wage | Tipped Min Wage | Notes |
|---|---|---|---|
| Alabama | $7.25 | $2.13 | No state law; federal applies |
| California | $17.00 | $17.00 | No tip credit allowed |
| Colorado | $14.81 | $11.79 | Tip credit max $3.02; CPI-adjusted |
| Florida | $14.00 | $10.98 | Annual Sep 30 increases |
| Illinois | $14.00 | $8.40 | Chicago has higher local rate |
| Massachusetts | $15.00 | $6.75 | Tip credit = $8.25/hr max |
| Michigan | $10.56 | $4.01 | Annual Jan 1 increases scheduled |
| Minnesota | $10.85 | $10.85 | No tip credit for large employers |
| Mississippi | $7.25 | $2.13 | No state law; federal applies |
| New Jersey | $15.49 | $5.62 | CPI-adjusted annually |
| New York | $16.00 | $10.65 | NYC/LI/Westchester = $16.50 |
| Ohio | $10.45 | $5.25 | Small employers (<$394K): $7.25 |
| Oregon | $14.70 | $14.70 | No tip credit; 3-tier zone system |
| Pennsylvania | $7.25 | $2.83 | At federal floor; proposed increases stalled |
| Tennessee | $7.25 | $2.13 | No state law; federal applies |
| Texas | $7.25 | $2.13 | State law mirrors federal; no changes scheduled |
| Virginia | $12.00 | $2.13 | Increase to $13.50 proposed for Jan 2027 |
| Washington | $16.28 | $16.28 | No tip credit; Seattle = $19.97 |
The Compliance Rule: Always Pay the Highest Applicable Rate
When federal, state, and local minimums all apply — and they often all do simultaneously — the employer must pay the highest of the three rates. There is no exception. A Seattle restaurant paying $16.28 (the Washington state minimum) instead of $19.97 (the Seattle city minimum) is violating the law, even though it is complying with state law. The Department of Labor and state labor agencies both have enforcement authority, and penalties for minimum wage violations can include back wages, liquidated damages equal to the back wages owed, and civil penalties per violation.
Practically speaking, this means employers with multi-location operations need location-specific pay rate tracking. A company with offices in Denver and a suburban Colorado location owes $18.29/hr in Denver and $14.81/hr outside city limits — different rules for workers doing the same job in different zip codes.
Scheduled Increases: What Is Coming in Late 2026 and 2027
Several states have automatic CPI-adjustment clauses or legislatively scheduled step increases on the horizon:
- Illinois — $15.00/hr scheduled for January 1, 2027 for employers with 4 or more employees
- Virginia — Legislature has proposed $13.50/hr effective January 1, 2027
- Florida — $15.00/hr target effective September 30, 2026 under Amendment 2
- Washington, Colorado, Arizona — Annual CPI adjustments will push rates higher effective January 1, 2027; exact amounts announced each October/November
- New York — NYC rate review planned for 2027; upstate regions may see additional phase-in increases