Minimum Wage Increases Take Effect July 1 Across the Country

Employers across the country face a new round of minimum wage increases effective July 1, 2026. While most states and localities set their minimum wage changes at the start of the calendar year, a number of jurisdictions, including several states and more than a dozen cities and counties, adjust their wage floors mid-year instead, on a schedule tied to inflation indexing or a phased local ordinance. For multistate employers, the July 1 changes are a useful reminder that minimum wage compliance is not a once-a-year exercise, and that wage floors should be checked on a rolling basis throughout the year rather than only in January.

State-Level Increases: Alaska, Oregon, and the District of Columbia

Three jurisdictions are raising their statewide (or district-wide) minimum wage on July 1, 2026:

• Alaska: The minimum wage increases from $13.00 to $14.00 per hour, the latest step under a 2024 ballot measure that will continue raising the state's wage floor by $1.00 per year until it reaches $15.00 in 2027. Alaska does not permit employers to take a tip credit, so there is no separate tipped minimum wage.
• Oregon: The state's minimum wage adjusts every July 1 based on the Consumer Price Index, and increases again this year across its three-tier system, which sets different rates for the Portland metro urban growth boundary (rising from $16.30 to $16.80 per hour), the standard (mid-size county) rate (rising from $15.05 to $15.55 per hour), and non-urban counties (rising from $14.05 to 14.55 per hour). As in Alaska, Oregon does not allow a tip credit.
• District of Columbia: The minimum wage increases from $17.95 to $18.40 per hour, with the minimum cash wage for tipped employees rising from $10.00 to $10.30 per hour. Employers must make up the difference if a tipped employee's cash wage plus tips does not reach the full $18.40 minimum.

Local Increases in California, Illinois, Maryland, and Washington

Beyond the three states above, more than a dozen cities and counties are increasing their local minimum wage rates on July 1, 2026, largely as a result of automatic inflation-indexing provisions written into their local ordinances. Employers with operations in the following jurisdictions should confirm their new rates:

• California: A number of cities, including Los Angeles and San Francisco, adjust their local minimum wages each July 1 based on regional inflation measures. California also has an industry-specific minimum wage for certain healthcare workers that increases on the same date. In San Francisco, for instance, the minimum wage is increasing to $19.61 per hour.
• Illinois: Chicago's minimum wage increases on July 1 under the city's inflation-indexing formula, rising from $16.60 to $17.05 per hour for employers with four or more employees. The city’s tipped minimum wage rises from $12.62 to $12.96 per hour.
• Maryland: Several Maryland counties with local minimum wage ordinances above the state rate adjust their rates on July 1 as well, including Montgomery and Howard Counties. In Montgomery County, the rate rises to $18.00 per hour for large employers (51 or more employees), $16.50 per hour for mid-size employers (11 to 50 employees), and $15.95 per hour for small employers (10 or fewer employees). In Howard County, the rate rises to $16.00 per hour for all employers, regardless of size, eliminating the county's prior size-based tiers. Prince George's County also maintains a local minimum wage above the state rate but is not scheduled to adjust again until January 2027.
• Washington: Washington's statewide minimum wage rose to $17.13 per hour on January 1, 2026, and several Washington cities maintain their own higher local rates. Two of those cities, Everett and Renton, increase their local rates a second time mid-year rather than adjusting only in January. Effective July 1, Everett's rate for mid-size employers (15 to 499 employees) rises from $18.77 to $19.77 per hour, and Renton's rate for mid-size employers (15 to 500 employees) rises from $20.57 to $21.57 per hour, aligning it with the rate already paid by large employers there. Other Washington localities, including Seattle, Bellingham, Tukwila, SeaTac, Burien, and unincorporated King County, maintain minimum wage rates above the state floor but did not schedule a mid-year change this year.

Employer Considerations Going Forward

Employers should consider:

• Reviewing the locations where employees perform work and confirming whether any new state or local minimum wage requirement applies, paying particular attention to employees who are remote, hybrid, or split across multiple work;
• Confirming that payroll systems reflect the correct minimum wage for each work location effective July 1, 2026, including any jurisdictions with mid-year or inflation-indexed adjustments;
• Verifying which employee-count and revenue thresholds apply to determine the correct wage tier in jurisdictions with size-based minimum wage schedules, and reassess as workforce size changes throughout the year;
• Building minimum wage compliance checks into recurring, multi-point calendars rather than a single annual January 1 review, since a number of jurisdictions adjust wages mid-year or on other non-standard schedules;
• Reviewing any jurisdiction-specific obligations beyond the hourly rate and confirm required notices and postings are current; and
• For employers with tipped employees, confirming whether the applicable jurisdiction permits any form of tip credit and, if so, whether the tipped cash wage has also changed.

Key Takeaway

As minimum wage requirements become increasingly localized, employers operating across multiple states and cities should not assume that their wage compliance obligations are settled once January's updates are implemented. The mid-year increases described above are a useful reminder to build recurring compliance checks throughout the year rather than a single annual review. For assistance, please contact one of Honigman’s Employment and Labor Attorneys here.