2026 Minimum Wage Updates: Midyear Changes for Employers

Published July 22, 2026

Minimum wage changes do not happen only at the beginning of the year. Several states and local jurisdictions are increasing their rates on July 1 or later in 2026, creating another important compliance deadline for employers. 

The changes include increases to standard minimum wages, tipped wages and rates that apply based on an employer’s location, size, industry or annual revenue. Employers should review the requirements for every location where employees perform work and make any necessary payroll changes before the applicable effective date. 

Minimum Wage Changes Taking Effect in the Second Half of 2026 

Several notable increases take effect during the second half of the year: 

  • Alaska’s minimum wage increased to $14 per hour on July 1. Alaska does not permit a tip credit. 
  • Washington, D.C., increased its minimum wage to $18.40 and its minimum tipped wage to $10.30 on July 1. 
  • Chicago’s minimum wage increased to $17.05 on July 1, while Cook County’s rate increases to $15.40. 
  • Howard County, Maryland, increased its minimum wage to $16 on July 1. 
  • Montgomery County, Maryland, increases its rates based on employer size. 
  • Florida’s minimum wage increases to $15 per hour on September 30. Its minimum tipped wage increases to $11.98. 
  • Oregon’s regional minimum wage rates increased to $16.80 in the Portland metro area, $15.55 in standard counties and $14.55 in nonurban counties.  
  • California, Minnesota, New Mexico and Washington localities also have increases taking effect during the second half of the year. 

These examples do not cover every change. Employers should review the full guide for additional state and local requirements. 

Employers May Face Multiple Wage Requirements 

Cities and counties may set minimum wages above the statewide rate or establish separate requirements based on employer size, revenue, industry or occupation. 

Several cities and counties within California have their own minimum wage ordinances. Some jurisdictions also set separate rates for hotel, airport, healthcare or other workers. 

Employer size also matters in some locations. Montgomery County, Maryland, uses different rates based on employee count. Some Washington jurisdictions consider employee count, annual gross revenue or both. 

Employers should carefully track where employees physically perform their work, including remote and mobile employees. When work takes place in more than one location, more than one wage requirement may apply. 

Tipped Employees Require a Separate Review 

Tip-credit rules vary significantly by jurisdiction. Some states, including Alaska, California, Minnesota, Oregon and Washington, do not permit employers to apply a tip credit. Employees in those states must receive the full applicable minimum wage directly from the employer. 

Employers wanting to utilize a tip credit should confirm: 

  • Whether the applicable jurisdictions allow it;  
  • Which employees qualify as tipped employees in the relevant jurisdictions; 
  • The maximum tip credit allowed in the relevant jurisdictions;  
  • The required direct cash wage in the relevant jurisdictions;  
  • Every pay period, whether employees’ wages and tips equal at least the full applicable minimum wage 

When an employee’s direct wages and tips do not equal the required minimum wage, the employer must pay the difference. 

Complying With Minimum Wage Requirements 

Keeping up with state and local wage requirements should be part of an employer’s regular payroll and compliance review. A few practical steps can help: 

  1.  Plan for increases that commonly take effect on or around January 1 and July 1 each year. Some jurisdictions use different effective dates. 
  2. Budget for scheduled increases, review pay rates for all hourly positions and apply any required adjustments before the effective date. 
  3. Track where employees physically perform their work. When employees work in multiple locations, multiple wage requirements may apply. 
  4. Identify any rates based on employer size, annual revenue, occupation or industry. 
  5. Apply the highest applicable minimum wage when federal, state and local requirements differ. 
  6. Review tipped-employee classifications, tip credits and minimum cash wage requirements. 
  7. Update required wage and hour posters and provide any required notices. Many local jurisdictions make updated posters available on their websites. 

Employers may also want to review pay relationships between entry-level employees and workers in more experienced or supervisory roles. A minimum wage increase can narrow the difference between positions and create questions about internal pay practices. 

Review the 2026 Minimum Wage Guide 

Engage PEO’s 2026 Minimum Wage Updates guide provides federal, state and local wage rates, maximum tip credits, minimum tipped wages and information about scheduled increases. It also highlights many of the changes taking effect on July 1 or later in 2026. 

The guide is intended as a general reference. Rates and requirements may change, and employers should confirm current federal, state and local requirements before making payroll or compliance decisions.