2026 Wage Guide: New Federal Enforcement Shifts & State Rate Hikes
- By Harri Insider Team | December 8, 2025
As of January 1, 2026
As we enter 2026, compliance requirements for hospitality employers are shifting not just in rates but in regulation. While the federal minimum wage remains stagnant, significant enforcement changes from the Department of Labor (DOL) and the IRS, combined with a record number of state-level increases, demand immediate operational attention.
Below is your breakdown of the essential updates effective January 1, 2026.
The 2026 Compliance Outlook
A divergence between federal enforcement strategy and state rate acceleration defines this cycle.
Federal Update: A Shift in Enforcement
In a significant development for employer liability, the U.S. Department of Labor’s Wage and Hour Division (DOL) issued a Field Assistance Bulletin on June 27, 2025, that fundamentally alters FLSA investigations. Effective immediately, DOL staff are prohibited from seeking or collecting liquidated damages during administrative investigations and settlements.
- What this means: While employees and the DOL can still pursue liquidated damages in court, the DOL itself will no longer seek them during standard audits. This may reduce the immediate financial pressure of administrative settlements, though compliance remains mandatory.
IRS Reporting Relief: “No Tax on Tips”
The IRS has announced it will not impose penalties for reporting failures regarding “No Tax on Tips” and “No Tax on Overtime” for the 2025 tax year.
- The nuance: While penalties are paused, the IRS “encourages” employers to provide employees with occupation codes and a detailed accounting of cash tips. This “transition relief” period is your window to update payroll systems before strict enforcement likely resumes.
2026 Rate Increases & Local Mandates
For 2026, 30 states (plus D.C.) now mandate wages higher than the federal standard. Operators in these jurisdictions must pay the higher state rate and observe state-specific overtime rules.
Notable Local Developments
Boulder County, CO: After significant pushback from independent business owners, Commissioners approved a new rate schedule. Effective January 1, 2026, the minimum wage in unincorporated Boulder County is $16.82 per hour, aligning with the City of Boulder. This replaces a previous plan that would have aggressively raised rates to $25 by 2030.
Portland, ME: Voters approved a ballot measure increasing the minimum wage to $16.75 per hour effective January 1, 2026. The rate is scheduled to rise annually, reaching $19.00 by 2028. The direct cash wage for tipped workers remains at $7.75, provided the tip credit makes up the difference to the new minimum.
St. Paul, MN: Ordinance No. 25-55 amends the city’s minimum wage laws by deleting the “macro” business category.Â
Minneapolis, MN: Effective December 31, 2025, amendments to the Workplace Regulations ordinance take effect, refining definitions for “Base Rate” and “Employee” specifically concerning Sick and Safe Time accrual and “chain establishments”.
California: Fast Food workers remain at $20.00/hour. While the Fast Food Council convened in 2025 to evaluate an inflationary adjustment, they elected not to implement an increase at that time. Future adjustments remain at the Council’s discretion.Â
Comprehensive 2026 Wage Schedule
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For a complete, state-by-state breakdown of all 2026 minimum wage rates, including tipped wage credits and exempt status thresholds, please refer to the Harri 2026 Minimum Wage Schedule attached below.
| Jurisdiction | Minimum Wage as of July 1, 2026 |
| Federal | $7.25 |
| Alabama | $7.25 |
| Alaska | $13.00 |
| Arizona | $15.15 |
| Arizona – Flagstaff | $18.35 |
| Arizona – Tucson | $15.45 |
| Arkansas | $11.00 |
| California | $16.90 |
| California – Fast Food Workers | $20.00 |
| California – Alameda | $17.46 |
| California – Belmont | $18.95 |
| California – Berkeley | $19.18 |
| California – Burlingame | $17.86 |
| California – Cupertino | $18.70 |
| California – Daly City | $17.50 |
| California – East Palo Alto | $17.90 |
| California – El Cerrito | $18.82 |
| California – Emeryville | $19.90 |
| California – Foster City | $17.85 |
| California – Fremont | $17.75 |
| California – Glendale Hotel Workers | $22.50 |
| California – Half Moon Bay | $17.91 |
| California – Hayward 26+ Employees | $17.79 |
| California – Hayward 1-25 Employees | $16.90 |
| California – Long Beach Hotel Workers | $25.00 |
| California – Long Beach Concessionaire | $18.58 |
| California – Los Altos | $18.70 |
| California – Los Angeles (City of) | $17.87 |
| California – Los Angeles Hotel Worker | $22.50 |
| California – Los Angeles County Unincorporated | $17.81 |
| California – Malibu | $17.27 |
| California – Menlo Park | $17.55 |
| California – Milpitas | $18.20 |
| California – Mountain View | $19.70 |
| California – Novato 100+ Employees | $17.73 |
| California – Novato 26-99 Employees | $17.46 |
| California – Novato 1-25 Employees | $16.90 |
| California – Oakland | Â |
| California – Oakland Hotel Employees | Â |
| California – Palo Alto | $18.70 |
| California – Pasadena | $18.04 |
| California – Petaluma | $18.31 |
| California – Redwood City | $18.65 |
| California – Richmond | $19.18 |
| California – San Carlos | $17.75 |
| California – San Diego | $17.75 |
| California – San Francisco | $19.18 |
| California – San Jose | $18.45 |
| California – San Mateo (City of) | $18.60 |
| California – San Mateo County | $17.95 |
| California – Santa Clara | $18.70 |
| California – Santa Monica | $17.81 |
| California – Santa Monica Hotel Workers | $22.50 |
| California – Santa Rosa | $18.21 |
| California – Sonoma Large Employer | Â |
| California – Sonoma Small Employer | Â |
| California – South San Francisco | $18.15 |
| California – Sunnyvale | $19.50 |
| California – West Hollywood | $20.25 |
| California – West Hollywood Hotel Workers | $20.22 |
| Colorado | $15.16 |
| Colorado – Boulder (City of) | $16.82 |
| Colorado – Boulder County | $16.82 |
| Colorado – Denver | $19.29 |
| Colorado – Edgewater | $18.17 |
| Connecticut | $16.94 |
| Delaware | $15.00 |
| District of Columbia | $17.95 |
| Florida | $14.00 |
| Georgia | $7.25 |
| Â | Â |
| Hawaii | $16.00 |
| Idaho | $7.25 |
| Illinois | $15.00 |
| Illinois – Chicago | $16.60 |
| Illinois – Cook County | $15.00 |
| Indiana | $7.25 |
| Iowa | $7.25 |
| Kansas | $7.25 |
| Kentucky | $7.25 |
| Louisiana | $7.25 |
| Maine | $15.10 |
| Maine – Portland | $16.75 |
| Maine – Rockland | $16.00 |
| Maryland | $15.00 |
| Maryland – Howard County 15+ Employees | $16.00 |
| Maryland – Howard County 1-14 Employees | $15.50 |
| Maryland – Montgomery County Large Employer | $17.65 |
| Maryland – Montgomery County Mid-Size Employer | $16.00 |
| Maryland- Montgomery County Small Employer | $15.50 |
| Massachusetts | $15.00 |
| Michigan | $10.56 (2/21/2026 – $13.29) |
| Minnesota | $11.41 |
| Minnesota – Minneapolis | $16.37 |
| Minnesota – St. Paul Macro & Employers | $16.37 |
| Â | Â |
| Minnesota – St. Paul Small Businesses | $16.37 |
| Minnesota – St. Paul Micro Businesses | $14.25 |
| Mississippi | $7.25 |
| Missouri | $15.00 |
| Montana | $10.85 |
| Nebraska | $15.00 |
| Nevada | $12.00 |
| New Hampshire | $7.25 |
| New Jersey – Most Employers | $15.92 |
| New Jersey – Small Employers | $15.23 |
| New Mexico | $12.00 |
| New Mexico – Albuquerque | $12.00 |
| New Mexico – Las Cruces | $13.01 |
| New Mexico – City of Santa Fe | $15.00 |
| New Mexico – Sante Fe County | $15.00 |
| New York – Nassau, Suffolk, Westchester Counties | $17.00 |
| New York – New York City | $17.00 |
| New York – Rest of state | $16.00 |
| North Carolina | $7.25 |
| North Dakota | $7.25 |
| Ohio | $11.00 |
| Oklahoma | $7.25 |
| Oregon – Standard | $15.05 |
| Oregon – Portland, Urban Growth | $16.30 |
| Oregon – Non-Urban Counties | $14.05 |
| Pennsylvania | $7.25 |
| Â | Â |
| Rhode Island | $16.00 |
| South Carolina | $7.25 |
| South Dakota | $11.85 |
| Tennessee | $7.25 |
| Texas | $7.25 |
| Â | Â |
| Utah | $7.25 |
| Vermont | $14.42 |
| Virginia | $12.77 |
| Washington | $17.13 |
| Washington – Bellingham | $19.13 |
| Washington – Burien Large Employer | $21.63 |
| Washington – Burien Small Employer | $20.63 |
| Washington – Everett Large Employer | $20.77 |
| Â | Â |
| Washington – Unincorporated King County 500+ Employees | $20.82 |
| Washington – Unincorporated King County 15-499 Employees | $19.82 |
| Washington – Unincorporated King County <15 Employees and $2mil+ annual gross revenue | $18.32 |
| Washington – Unincorporated King County <15 Employees and <$2mil+ annual gross revenue | $18.32 |
| Washington – Renton Large Employer | $21.57 |
| Washington – Renton Mid-Size Employer | $20.57 |
| Washington – Seattle | $21.30 |
| Washington – SeaTac | $20.74 |
| Washington – Tukwila Large Employer | Â $21.65 |
| West Virginia | $7.25 |
| Wisconsin | $7.25 |
| Wyoming | $7.25 |
| Â | Â |
How to Prepare for Minimum Wage Increases
Audit Your Notices: With St. Paul and Minneapolis enforcing stricter notice requirements, ensure your onboarding packets include the latest localized wage statements.
Review Tip Reporting: Use the IRS “transition period” to configure your POS and payroll systems to accurately track occupation codes and cash tips, even if penalties are waived for now.
Update Labor Posters: Ensure all physical and digital work, especially for remote or hybrid Ops teams, displays the 2026 mandated posters.
Navigate Compliance with Harri
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Harri can help streamline your response to these jurisdictional changes. Our platform offers tools to help distribute digital wage notices to new hires and integrate updated tip reporting codes into your payroll workflow.
