How Many States Raised the Minimum Wage for 2026
HR Dive, reporting in early January 2026, counted 19 states with a minimum wage increase effective January 1, 2026, with three more states, Florida, Alaska, and Oregon, set to raise their rates later in the year on separate schedules. Other trackers report 20 to 22 states for 2026 depending on which later-effective-date states they fold into the count. The 19-state figure here is specifically the January 1 effective-date count, worth stating explicitly if a single, unambiguous number is needed.
The 2026 Rate Range: $10.85 to $17.13 an Hour
Montana’s new rate, $10.85 an hour, is the lowest of the 19 states that raised wages on January 1. Washington state’s $17.13 an hour is the highest statewide rate, with New York City reaching $17.00, Connecticut $16.94, and California $16.90. The federal minimum wage sits at $7.25 an hour, unchanged since 2009, a gap of nearly $10 an hour between the federal floor and the highest state rate.
How a Pay-Rate Floor Rise Squeezes the Bill Rate, Beyond Payroll
A staffing bill rate is built from the pay rate plus markup, the employer-side costs and margin layered on top, per HCMWorks’ own breakdown of the mechanic. When a state raises the pay-rate floor, the arithmetic behind an existing bill rate has to move too, unless a firm is willing to absorb the increase out of its own margin instead of passing it through. A client comparing rate cards across vendors is not always willing to accept the full pass-through, which is exactly the moment markup compresses.
A Worked Example of the Squeeze
This next example is an illustrative calculation rather than a benchmarked industry figure. Take Montana’s new $10.85 pay-rate floor with a firm running a 40% markup, that produces a $15.19 bill rate. If the client will only accept a $14.50 bill rate instead of the full pass-through, the same $10.85 pay rate now sits under a markup of roughly 33.6%, a compression of more than six points from a client who would not absorb the mandated increase in full.
The same mechanic scales with the size of the wage increase. A state moving its floor further, or a firm operating on a thinner markup to begin with, feels the same squeeze faster, since there is less room in the spread to give up before margin turns negative.
Why the State Count You See Varies by Source
Different trackers report 19, 20, or 22 states for 2026, and the difference is not a factual disagreement, it is a difference in which later-effective-date increases get counted alongside the January 1 batch. Florida, Alaska, and Oregon all raise their rates later in 2026 on their own separate schedules, so a source counting all of 2026’s eventual increases together will land on a higher number than the January 1-specific count used here.
The Numbers
19 states raised their minimum wage effective January 1, 2026; three more states, Florida, Alaska, and Oregon, raise theirs later in the year on separate schedules.
New 2026 state minimum wage rates range from $10.85 an hour in Montana, the lowest of the 19, to $17.13 an hour in Washington state, the highest statewide.
Other named 2026 rates: California $16.90; Connecticut $16.94; New York City $17.00.
The federal minimum wage remains $7.25 an hour, unchanged since 2009.
A staffing bill rate is built from pay rate plus markup, the mechanic that determines how much of a mandated pay-rate increase reaches the bill rate versus a firm’s own margin.
Sources
The external data in this article draws on the sources below. Figures described in the text as estimates or industry triangulations are directional and are not attributed to a single dataset.
- HR Dive, Minimum Wage Increases Hit 19 States in 2026
- HCMWorks, Understanding Pay Rate, Markup, and Bill Rate