- with Senior Company Executives, HR and Inhouse Counsel
At a Glance
- Highlights notable rate-related developments in the first half of 2026
- Identifies minimum wage rate increases for non-exempt (including tipped) employees on July 1, 2026
- Lists increases to exempt employee pay resulting from minimum wage increases on July 1, 2026
Fuel prices are on the rise, and so are wages, so get your fill of notable rate-related developments since our January 1 update, along with known nonexempt and exempt employee rate changes that will take effect on July 1, 2026. The below numbers represent rates “known” at the time of publication, so subsequent legislative or agency activity, or revised announcements concerning inflation-adjusted wage rates,1 could change these figures on or after July 1, 2026.
Notable Rate-Related Developments Since Our First-of-the-Year Update
Enacted Changes
California (Los Angeles): The mayor signed Ordinance 188944, which effective June 29, 2026, amends the cash and hourly benefits rates under the Citywide Hotel Worker Minimum Wage Ordinance (CHWMWO) and Living Wage Ordinance. As a result, applicable cash and hourly health benefits rates will increase annually in lower amounts than the city previously established via legislation a year earlier. Under the CHWMWO, for rates applicable on July 1, 2026, the cash wage payable if an employer provides sufficient health care benefits will not change, but the hourly health benefit rate will be less than originally established.
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Connecticut: The governor signed HB 5003, which, effective October 1, 2026, prohibits employers from claiming and applying a tip credit toward payment of the minimum wage for employees at cannabis establishments, dispensary facilities, and cannabis producers.
Illinois (Chicago): The One Fair Wage Compromise Ordinance changes the maximum tip credit employers can apply toward payment of the Chicago minimum wage for covered tipped employees. The current maximum tip credit, 24% of the Chicago minimum wage, was set to change on July 1, 2026, but the amendments delay when the next percentage decrease will occur. Additionally, tip credit percentages will vary depending on whether an employer has 21 or more, or four to 20, employees; eventually, all tipped employees, regardless of employer size, will need to be paid the full minimum wage. For employers with 21 or more employees, the maximum tip credit will decrease on July 1 to 16% (2028), then to 8% (2029), with tipped employees receiving the full minimum wage on July 1, 2030. The tip credit phase-out will take longer for employers with four to 20 employees. It will remain 24% through June 30, 2030, with it decreasing on July 1 to 16% (2030), 12% (2031), and then 6% (2032), with all tipped employees receiving the full minimum wage on July 1, 2033.
Nebraska: The governor signed LB 258, which changes how the state will annually adjust its minimum wage, starting with the rate applicable on January 1, 2027. Each future annual adjustment will increase the state minimum wage by 1.75%.
Nebraska (Lincoln): In response to the above-referenced state action, on May 11 the Lincoln City Council passed, and on May 15 the mayor signed, Ordinance 21872 to create a local minimum wage ordinance based on state rates and standards voters had approved at the November 2025 election, which was later amended. This occurred shortly after a May 7 opinion letter by the state attorney general that contended any such minimum wage ordinance would be unlawful and preempted by state law. It remains to be seen whether the state will respond or a private entity will challenge the city’s authority to enact such a law. Assuming a (timely) challenge does not occur, on July 18, 2026, the minimum wage will be $15 per hour, whereas tipped employees can be paid $2.13 per hour if their direct wage plus tips equals or exceeds the local minimum wage.
Virginia: The governor signed HB 1, which codifies the 2026 minimum wage rate set by the state labor department ($12.77), establishes preset rates applicable on January 1 in 2027 ($13.75) and 2028 ($15.00), and has the state labor department resume annual adjustments to the minimum wage, beginning with the adjusted rate effective January 1, 2029. Additionally, the governor signed SB 121, which, effective January 1, 2027, requires farmworkers to be paid at least the state minimum wage.
Washington (Burien): On May 18, the city enacted Ordinance No. 892 to repeal the existing minimum wage ordinance and replace with the 2025 voter-approved ordinance that the city had challenged in court. Additionally, the ordinance changed standards for when a business qualifies as “large,” “medium,” or “small,” for minimum wage rate purposes. As a result, on May 27, a new three-tier rate system took effect (replacing the two-tier system). Originally, on or around May 21, the city announced that the rate would be: $21.71 (501 or more employees); $20.71 (16-500 employees); $19.21 (15 or fewer employees). However, on June 4, the city revised the rates to $21.78, $20.78, and $19.21, respectively.
Pending / Possible Future Changes
New Mexico (Albuquerque): On June 8, 2026, the city council sent to the mayor Ordinance 26-33, which proposes to revise the Albuquerque Minimum Wage Ordinance. If amended, the Albuquerque minimum wage will be the rate set by the ordinance or the state minimum wage, whichever is higher. The minimum wage will increase to, on January 1, $13.00 (2027), $14.00 (2028), $15.00 (2029), with annual adjustments resuming for the rate applicable in 2030 and future years. The minimum cash wage for tipped employees will decrease from 60% of the minimum wage to, on January 1, 55.5% (2027), 52% (2028), and 50% (2029 and future years).
Minimum Wage on the (Upcoming) Ballot
On June 16, 2026, Oklahoma voters will determine the fate of State Question 832, which proposes establishing preset rates applicable on January 1 in 2027 ($12), 2028 ($13.50), and 2029 ($15), with annual adjustments occurring in 2030 and subsequent years.
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Minimum Wage Rate Changes that Took Effect Before July 1, 2026
Jurisdiction
Minimum Wage
Cash Wage
Tip Credit
New Mexico (Santa Fe) (Mar. 1)
$15.40
$3.00
$12.40
New Mexico (Santa Fe County) (Mar. 1)
$15.40
$4.62
$10.78
Washington (Burien) (May 27)
$21.78 (501+ Employees)
$20.78 (16-500 Employees)
$19.28 (1-15 Employees)
(Also, see above)
Not Applicable
Prohibited
Minimum Wage Rates Effective July 1, 2026
In the chart below we include the (mostly) generally applicable minimum wage that will change / apply on July 1, 2026. However, we do not discuss sub-minimum wage rates that might apply to certain employees (e.g., for learners or certain minors), heightened minimum wage rates that apply under certain circumstances (e.g., declared emergencies), industry- or position-specific rates (for the most part), and/or pay standards that apply to various “gig” workers. Businesses with questions about these types of laws, or rates, should contact counsel.
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In certain jurisdictions employers may be able to count tips an employee receives toward the minimum wage. In those jurisdictions that permit a tip credit, if the direct wage an employer pays (minimum cash wage) and tips an employee earns equals the minimum wage, an employer satisfies its minimum wage obligation, but, if the direct wage plus tips does not equal the minimum wage, an employer must pay the employee the difference.
Certain jurisdictions might have a multi-tier minimum wage that varies depending on factors like the number of employees a business has, the type of worker, etc. Additionally, a particular rate might be on a different update schedule. In the chart below we focus solely on the rate(s) in a jurisdiction that change(s) on July 1, 2026. The only exception will be when there is a change to a local minimum wage but not the state minimum wage. Employers with questions about other rates applicable in a jurisdiction that are not changing on July 1, 2026, should contact counsel.
Jurisdiction
Minimum Wage
Cash Wage
Tip Credit
Alaska $14.00 Not Applicable Prohibited California (General) $16.90 (No Change) Not Applicable Prohibited California (Healthcare Tier2 1) $25.00 Not Applicable Prohibited California (Healthcare Tier 2) $19.28 Not Applicable Prohibited California (Healthcare Tier 3) $22.00 Not Applicable Prohibited California (Healthcare Tiers 4-5) $23.00 Not Applicable Prohibited -Alameda $17.76 Not Applicable Prohibited -Berkeley $19.61 Not Applicable Prohibited -Emeryville $20.34 Not Applicable Prohibited -Fremont $18.05 Not Applicable Prohibited -Glendale (Hotels) $25.00 -Long Beach (Hotels) $26.50 Not Applicable Prohibited -Los Angeles (General) $18.42 Not Applicable Prohibited -Los Angeles (Hotel) $25 to $29.25, depending on health benefits offered Not Applicable Prohibited -Los Angeles County (Unincorporated) $18.47 Not Applicable Prohibited -Malibu $17.91 Not Applicable Prohibited -Milpitas $18.50 Not Applicable Prohibited -Pasadena $18.57 Not Applicable Prohibited -San Diego (Amusement Parks & Hotels) $19.00 Not Applicable Prohibited -San Diego (Event Centers) $21.06 Not Applicable Prohibited -San Francisco $19.613 Not Applicable Prohibited -Santa Monica $18.47 Not Applicable Prohibited -Santa Monica (Hotels) $25.00 Not Applicable Prohibited -West Hollywood (Hotel-Related) $20.87 Not Applicable Prohibited District of Columbia $18.40 $10.30 $8.10 Illinois $15.00 (No Change) $9.00 (No Change) $6.00 (No Change) -Chicago $17.05 $12.96 $4.09 -Cook County $15.40 (See note4) $9.25 $6.15 Maryland $15.00 (No Change) $3.63 (No Change) $11.37 (No Change) -Howard County (14 or Fewer Employees, Food Service Facility & Some Others5) $16.00 $3.63 $12.37 -Montgomery County (51 or More Employees) $18.00 $4.00 (No Change) $14.00 -Montgomery County (11-50 Employees & Some Others6) $16.50 $4.00 (No Change) $12.50 -Montgomery County (10 or Fewer Employees) $15.95 $4.00
(No Change)$11.95 Minnesota $11.41 (No Change) Not Applicable Prohibited -Saint Paul (6-100 Employees) $16.37 Not Applicable Prohibited -Saint Paul (5 or Fewer Employees) $14.25 Not Applicable Prohibited Oregon (General7) $15.55 Not Applicable Prohibited Oregon (Urban) $16.80 Not Applicable Prohibited Oregon (Nonurban) $14.55 Not Applicable Prohibited Washington $17.13
(No Change)
Not Applicable Prohibited -Everett (15-500 Employees) $19.77 Not Applicable Prohibited -Renton (15-500 Employees or Annual Gross Revenue Exceeds $2 Million) $21.57 Not Applicable Prohibited
Exempt Employee Pay Increases on July 1, 2026
Executive, Administrative and/or Professional Employees: Under federal law, most exempt executive, administrative, and professional employees must be paid on a salary or (for only administrative or professional exemptions) fee basis, and the weekly minimum salary amount is $684 per week.8 The following states have minimum salary pay requirements that exceed the federal rate and will change on July 1, 2026.
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State
Minimum Weekly Amount
Alaska $1,120
California (Healthcare Tier 1) $1,500
California (Healthcare Tiers 4-5) $1,380
Inside Sales: To qualify under the FLSA’s 7(i) overtime exception, the regular rate of pay for an employee of a retail or service establishment must exceed one-and-a-half times the federal minimum wage, and more than half of the employee’s compensation for a representative period (not less than one month) must represent commissions on goods or services. In the following states with upcoming rate changes on July 1, 2026, the 7(i)-type exemption requires – in part – an employee’s pay to either equal or exceed one-and-a-half times the state minimum wage: District of Columbia and Oregon.
White Collar Employees Covered by Minimum Wage: In various states, employees covered by the executive, administrative, professional, or outside sales exemptions are exempt from state overtime requirements, but not exempt from state minimum wage requirements. In these jurisdictions, such employees must earn at least the applicable minimum wage for each hour worked in a workweek. Of these states, in Illinois, there will be increases to local minimum wage rates on July 1, 2026.
Minimum Wage Rate Changes that Will Take Effect After July 1, 2026, but Before January 1, 2027
|
Jurisdiction |
Minimum Wage |
Cash Wage |
Tip Credit |
|
Nebraska (Lincoln) (July 18) |
$15.00 |
$2.13 |
$12.87 |
|
Florida (Sept. 30) |
$15.00 |
$11.98 |
$3.02 |
Footnotes
1.See, e.g., The B-Town (Burien) Blog, Burien minimum wage debate takes unusual turn as initiative supporters back business owners’ concerns (Updated June 9, 2026), available here.
2. To learn more about which entities qualify under which Tier – our terminology, not the law’s – see California Labor Commissioner, Health Care Worker Minimum Wage Frequently Asked Questions.
3. There is a separate rate for government supported employees of $17.35.
4. Under the Cook County Minimum Wage Ordinance, covered employees must be paid a wage that is the highest of the federal minimum wage, Illinois minimum wage, or adjusted-for-inflation Cook County minimum wage. For the wage applicable on July 1, 2025, the Commission on Human Rights announced that the required wage would be $15.00, which is the Illinois minimum wage. In announcing the wage payable on July 1, 2026 – $15.40 – the Commission did not explain how the rate was calculated. Similarly, the Commission did not announce what the adjusted-for-inflation Cook County minimum wage would have been on July 1, 2025. We are monitoring Minimum Wage Ordinance and Regulations to see whether the $15.40 rate will remain the wage payable under the ordinance or whether it will be revised before July 1, 2026.
5. An employer that has tax-exempt status under federal Internal Revenue Code § 501(c)(3) and an employer that provides home health services (42 C.F.R. § 440.70) or home or community-based services (42 C.F.R. § 440.180), and receives at least 74% of gross revenues through state and federal Medicaid programs.
6. An employer with 11 or more employee that either is tax-exempt under Internal Revenue Code § 501(c)(3) or provides home health services or home or community-based services and receives at least 75% of gross revenues through state and federal Medicaid programs.
7. To understand the geographic differences between General, Urban, and Nonurban, see Oregon Bureau of Labor & Industries, Oregon Minimum Wage.
8. Notably, on May 14, 2026, the DOL published a technical amendment designed to unwind a 2024 regulation and restore the 2019 regulation establishing the salary level needed to qualify for the FLSA “white collar” overtime exemptions. See Christian Angotti, Dimitrios Markos, and Rob Pritchard, Department of Labor Restores Salary Levels for FLSA White Collar Exemptions, Littler ASAP (May 14, 2026).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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