New York's minimum wage won't rise on January 1, 2027

Every October restaurants get the list of states raising wages on January 1, and every year the list is treated as a single number: how much the minimum goes up. For a restaurant with tipped staff that's the wrong number. What matters is how the increase splits between the server's cash wage and the tip credit, and that depends on a rule most lists don't print.

This year also has an exception at the top of the list. New York, which has raised its minimum at almost every turn of the year since 2016, won't.

New York pauses

The state's own page says the rates stay at $17.00 in New York City, Long Island and Westchester and $16.00 elsewhere through 2027, because "one of the off-ramp conditions was met" — July employment came in below earlier months. The governor has proposed an increase to $17.60 and $16.55 effective March 1, 2027, but no bill had been introduced as of early October. Plan New York budgets on today's rates, with a possible spring change.

The January 1, 2027 increases

Washington, California, Michigan, Maine and Montana are from the states' own announcements or statutes, as is New Jersey's, issued September 29. Colorado, Ohio, Minnesota, Arizona and Rhode Island come from reports citing the state releases, and Nebraska's dollar figure is my arithmetic on its new statute, which adds 1.75% each January. Virginia goes to $15 on January 1, 2028. Ohio's rate applies to employers with more than $420,000 in gross receipts.

Who absorbs the increase depends on the tip-credit rule

There are four systems, and they produce very different costs for the same headline:

• Fixed tip credit — New Jersey, Colorado, Arizona, Florida, and Denver. The credit stays the same dollar amount, so the whole increase lands on the cash wage. New Jersey's server cash wage rises 56 cents because the $9.87 credit doesn't move.
• Fixed cash wage — Virginia, Nebraska, Connecticut, and the federal $2.13. The cash wage stays put, so Virginia's $0.98 increase changes a server's cash wage by nothing. What grows is your make-up obligation on slow shifts, when tips don't cover the gap.
• Percentage of the minimum — Maine and Ohio at 50%, Michigan at 42% and rising. Both pieces grow. Michigan's tipped cash wage rises 81 cents, about 15%, and the percentage climbs two points a year until it reaches 50% in 2031.
• No tip credit — California, Washington, Oregon, Minnesota, Montana, Alaska, Nevada, Seattle. Tipped staff get the full increase. In Washington that's 60 cents an hour per server.

For a full-service restaurant, Michigan is the expensive state this year: the largest increase in the standard rate and a growing share carried by the cash wage. The tip credit post covers how Michigan got here.

Local rates that move on January 1

• Seattle: $21.30 to $22.14, for every employer size. Small employers can no longer count tips or medical benefits toward it.
• Denver: $19.29 to $19.84; tipped $16.82.
• Minneapolis: $16.37 to $17.02.
• California cities including San Diego ($18.35), West Hollywood ($20.94) and Palo Alto ($19.25) rise too. California's fast-food minimum is still $20.00, so the gap to the state rate narrows to $2.60.

Chicago, Oregon, DC, Alaska and Los Angeles move on July 1, not January

1. Chicago's tipped wage is $12.96 since July and keeps rising toward the full minimum by mid-2028.

Not changing on January 1

The federal minimum is still $7.25, with a $2.13 tipped cash wage. No change is scheduled in January for Delaware, Maryland, Illinois, Massachusetts, Hawaii, New Mexico or Nevada. Hawaii's next step is $18 in 2028. Florida reached $15 on September 30.

And no statewide minimum wage measure is on the November ballot. Oklahoma's went to voters in June and failed, 55% to 45%.

What I'm not going to give you

A count of states raising wages. Trackers say anywhere from 13 to 19, depending on how they count New York and states that hadn't announced.

Vermont's and South Dakota's 2027 rates. Neither was officially published in what I could find.

Chicago's July 2027 tipped step and Los Angeles's hotel rates. Both are in documents I couldn't confirm.

What to do

1. Find your state's tip-credit system in the list above before you look at the headline rate.
2. Recompute cash wages for every tipped job code effective with the first pay period that includes January 1.
3. In fixed-cash-wage states, check slow shifts. The make-up to minimum is where your cost grows.
4. Reprice the menu once, in December, rather than chasing each increase. The menu pricing guide covers how.
5. Update the posters. Every state above publishes a new one.
6. Calendar July 1 if you have locations in Chicago, Oregon, DC, Alaska or Los Angeles.

For the labor-cost math these rates feed into, see restaurant labor cost percentage.

Disclosure: I work at Katalyst, whose POS stores wage rates by job code and location. The rates above change on a fixed date whatever system you use; the work is making sure your payroll changes with them.