Legislative lowdown: The minimum wage went up in 19 states on Jan. 1

A new year means new wages for millions of workers across the country.

As of Jan. 1, 2026, the minimum wage rate increased in 19 states, as well as 47 different cities and counties. The state-level minimum wage increases are expected to affect earnings for more than 8.3 million workers, according to an estimate from the left-leaning Economic Policy Institute.

Hawaiians saw the biggest hourly minimum wage boost at the start of this year, as the rate increased by $2, from $14 to $16. Workers in Missouri and Nebraska also saw substantial increases—the hourly minimum wage rose by $1.25 and $1.50 in these states, respectively.

These wage increases come at a time when compensation and benefits are barely outpacing inflation, according to recent federal data. The amount that employers spent on wages and benefits rose 3.5% in September, according to the Bureau of Labor Statistics, but this uptick was the lowest level since 2021, and just slightly higher than the inflation rate.

A number of states enacted minimum wage hikes with inflation in mind. Thirteen states, as well as 44 cities and counties, increased the minimum wage rate due to cost-of-living adjustments, according to the National Employment Law Project. California, South Dakota, Virginia, and New Jersey are among the states whose minimum wages increased due to inflation.

Impact of the Fight for $15. Fast-food workers started calling for a $15 minimum wage more than a decade ago, but the Fight for $15 continues to have an effect on compensation policies across the country.

In a historical first, more workers will be entitled to a $15 an hour or higher minimum wage than those based in jurisdictions where it’s set at the federal minimum of $7.25. Six states—Arizona, Colorado, Hawaii, Maine, Missouri, and Nebraska—will reach or exceed the $15 hourly minimum wage this year, putting the total number of states that require employers to pay this rate at 17, plus Washington, DC.

A $15 minimum wage doesn’t go as far in 2026 as it did in 2012, of course. In some other jurisdictions, like West Hollywood and Seattle, the minimum wage is now more than $20 an hour.

The effect of calls to end the subminimum wage, which allows employers to pay their tipped workers less than the federal minimum, is also evident in 2026 wage rates. As of Jan. 1, employers in Flagstaff, Arizona must pay tipped workers the standard minimum wage rate of $18.35 an hour, with workers entitled to earn this rate in addition to tips. This change is the result of a ballot initiative that was first passed in 2016.

Best practices for HR. No matter how minimum wage rates are changing for your workers, the basics of managing them haven’t changed much.

Employees must be paid the highest minimum wage rate in effect where they work. HR leaders could be on the lookout for secondary effects that can arise from wage increases, such as higher health insurance premium or retirement match costs. And when lower-level workers receive pay raises, higher-level employees might expect the same, so HR teams could plan to respond to those demands, as well.