With 2026 upon us, employers with employees working in California, Connecticut, New Jersey and beyond must prepare for scheduled minimum wage increases. Please note the following new minimum wage, tip credit and overtime rates.

CALIFORNIA

State Minimum Wage

On January 1, 2026, the minimum wage in California will increase to $16.90 per hour for all employers. 

Local Differences

However, several cities and counties in California have a local minimum wage that is higher than the state minimum wage, and some are slated to increase as of January 1, 2026 including, but not limited to:

• Menlo Park - $17.55 per hour
• Mountain View - $19.70 per hour
• Palo Alto - $18.70 per hour
• San Diego - $17.75 per hour
• San Jose - $18.45 per hour
• Santa Clara - $18.70 per hour
• Sunnyvale - $19.50 per hour
• West Hollywood - $20.25 per hour

Other cities and counties will see the minimum wage increases throughout 2026 to yet-to-be-determined rates, including the City of Los Angeles (currently $17.87 per hour), unincorporated areas in Los Angeles County outside the City of Los Angeles (currently $17.81 per hour) and San Francisco (currently $19.18). Additionally, the minimum wage for fast food restaurant employees, those individuals working at a restaurant that is part of a national chain with 60 or more restaurants nationwide where customers order and pay for their items before consuming them either on or off the premises, is currently $20.00 per hour, but this may be adjusted for inflation on January 1, 2026, and every January 1 thereafter through January 1, 2029.

Please be reminded that hospitality employers in California are not permitted to take a tip credit from the minimum wage for any employee.

CONNECTICUT

All Employers

Effective January 1, 2026, the minimum wage will increase to $16.94 per hour for all employers in Connecticut.

Tipped Employees – Hospitality Industry 

Connecticut employers may take a tip credit from the wages of hospitality industry employees. However, Connecticut makes a distinction between bartenders and other service employees. The term “service employee” refers to employees other than bartenders, who are employed in the hotel and restaurant industry, including a hotel restaurant, who customarily and regularly receive gratuities.

Service Employees:

Provided that a service employee’s weekly tips plus wages equals or exceeds the basic minimum hourly wage rate, a tip credit towards the wages of tipped service employees (other than bartenders) may be taken as follows:

Service Employees:

Bartenders:

Provided that a bartender’s weekly tips plus wages equals or exceeds the basic minimum hourly wage rate, a tip credit towards the wages of tipped bartenders may be taken as follows:

NEW JERSEY

The minimum wage will increase for all employers in New Jersey effective January 1, 2026. However, the new minimum wage will depend on employer size.

All Employers

Employers who employ six or more employees in New Jersey (“Large Employers”) will be subject to a different minimum wage than those that employ five or fewer employees (“Small Employers”). The new minimum wage for Large Employers and Small Employers in New Jersey is as follows:

Please note that regardless of the employer’s size, employees engaged in “seasonal employment” are subject to the “Small Employer” pay scale.

Tipped Employees – Hospitality Industry

Because large employers are subject to a different minimum wage scale than small employers, the amount of tip credit large employers may take from tipped employees’ minimum wage will differ from the amount of the tip credit small employers may take:

ADDITIONAL STATEWIDE INCREASES

In addition to the above, employers in the following states will also see minimum wage increases on January 1, 2026:

• Alaska
• Arizona
• Colorado
• Delaware
• Maine
• Michigan
• Minnesota
• Missouri
• Montana
• Nebraska
• New York
• Ohio
• Rhode Island
• South Dakota
• Vermont
• Virginia
• Washington

In addition to these statewide increases, many counties and cities will also see increases to their minimum wage on January 1, 2026.

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As a reminder, for hospitality employers who take a tip credit from tipped employees’ wages, the employee should be notified in writing of the new wage rate and tip credit.

If you have questions or would like additional information, please contact our Labor & Employment attorneys or the primary EGS attorney with whom you work.