U.S. Minimum Wage Increase 2026: New Hourly Rates Effective February 27

U.S. Minimum Wage Increase 2026: What this change means

Several states and localities will implement minimum wage adjustments that take effect February 27, 2026. Changes may come from state law, city ordinances, or price-indexed schedules. These increases affect payroll, hiring, and take-home pay calculations for many workers and employers.

This article explains how to find the new hourly pay rates, who is covered, and practical next steps for employers and employees to prepare.

How to confirm the new hourly pay rates effective February 27

There is no single nationwide rate change unless Congress enacts a federal increase. Many increases occur at the state or local level and will apply on different dates.

• Check your state labor department website for official rate tables and effective dates.
• Look up city or county ordinances if you work in a locality with its own minimum wage.
• Use the U.S. Department of Labor website to confirm whether a federal change applies.

Key places to verify U.S. minimum wage increase 2026 rates

• State labor or workforce agency web pages
• Local city government or municipal code sites
• Employer payroll provider notices and IRS guidance
• Official press releases dated before February 27, 2026

Who is affected by the U.S. minimum wage increase 2026 changes

Coverage depends on jurisdiction and job type. Typical categories include most hourly employees, specified tipped workers, and certain government contractors.

• Employees paid hourly who meet the state or local coverage rules.
• Tipped workers—rates may differ; employers often must make up the difference if tips do not reach the required wage.
• Exempt employees (salaried, managerial) generally are not covered, but salary thresholds can change employer classification tests.

Practical steps for employers before February 27

Employers should review and update payroll systems early. Small oversights can cause compliance issues and unexpected tax filings.

• Update payroll rates and effective dates in payroll software.
• Notify staff in writing about the new rate, effective date, and any change to pay schedule.
• Audit job classifications to ensure salaried exemptions still apply after rate adjustments.
• Prepare budget adjustments to account for increased labor costs, overtime, and benefits tied to wages.

How to calculate take-home pay and employer cost after the wage increase

When a wage floor changes, both gross and net pay shift. Employers also face higher payroll taxes and possibly higher benefit costs.

Use this simple method to estimate impact:

• Gross weekly pay = new hourly rate × weekly hours.
• Estimate payroll taxes = gross pay × employer tax rate (Social Security, Medicare, unemployment).
• Net pay = gross pay − employee withholdings (federal, state, Social Security, Medicare).

Example calculation

If an hourly worker moves from $12.00 to $15.00 and works 30 hours: gross weekly pay rises from $360 to $450. Employers should plan for higher matching payroll taxes and any benefits tied to wages.

Case study: Small cafe preparing for the February 27 wage increase

The Green Bean Cafe employs 12 hourly workers. Management confirmed their city ordinance raises the municipal minimum to $15.50 on February 27, 2026. They followed a short checklist to stay compliant and control costs.

• Reviewed payroll system and set the effective date to February 27.
• Notified staff two weeks in advance with a clear pay table and FAQs.
• Reworked some schedules to limit overtime and cross-trained staff to improve efficiency.
• Adjusted menu prices modestly and tracked sales to measure offsetting revenue changes.

Result: Staff received timely raises, payroll remained compliant, and the owner monitored margins to inform future pricing decisions.

Common questions about the U.S. minimum wage increase 2026

Does the federal minimum wage change apply to all workers?

Only if Congress passes a federal increase. Otherwise, state and local changes apply only within their jurisdictions.

What about tipped employees?

Tipped employees are often subject to a lower direct cash wage, with employers required to make up any shortfall if tips do not bring pay to the full minimum. Verify your state rules and local ordinances.

Next steps and resources

Before February 27, 2026, follow this checklist:

• Confirm the official new rate for your work location and job type.
• Update payroll systems and employee records with the effective date.
• Inform employees in writing and provide examples of how the change affects pay.
• Consult a payroll provider or labor attorney for complex situations (contract workers, multi-state operations, exemptions).

Official resources: your state labor department website, the U.S. Department of Labor, and municipal government pages for local ordinances. Keep documentation of notices and payroll changes for your records.

Following these steps will help employees understand the new hourly pay rates and help employers remain compliant when U.S. minimum wage increase 2026 changes take effect on February 27.