Many new or expanded laws relating to minimum pay, compensation disclosure, leave of absence, and employer notice requirements have been adopted over the past few years. Even if your business hasn’t been affected yet, these trends are likely to continue into 2026, so it may be impacted in the future. Below, we cover two of these trends. In the coming weeks, we will address two more.
TABLE OF CONTENTS |
Trend #1: Minimum pay requirements are increasing
Minimum wage
All non-exempt employees must receive at least the highest applicable minimum wage for each hour worked and overtime pay whenever they work more than 40 hours in a week (some states require overtime in additional circumstances).
The federal minimum wage has remained $7.25 per hour since 2009. However, many states and local jurisdictions have increased their minimum wage above the federal level and adjust it annually to keep pace with inflation.
On January 1, 2026, nearly 20 states and more than 40 local jurisdictions will increase their minimum wages. Some of these minimum wages will be nearly triple the federal rate. Read our recent Tip of the Week for more details on these increases.
By contrast, some states and local jurisdictions have scheduled their changes or annual adjustments for a different point during 2026. The table below lists some examples of locations with expected minimum wage changes coming later in 2026.
|
Date |
State, district and local jurisdictions with minimum wage increases later in 2026 |
|
March 1 |
In New Mexico: Santa Fe (city and county) |
|
July 1 |
Alaska In California: The state’s health care worker minimum wage Also in California: Alameda (city), Berkeley, Emeryville, Fremont, Glendale (hotel workers), Long Beach (hotel and concessionaire workers), Los Angeles (city and county), Malibu, Milpitas, Pasadena, San Francisco, Santa Monica, and West Hollywood (hotel workers) District of Columbia In Illinois: Chicago and Cook County In Maryland: Howard County and Montgomery County In Minnesota: Saint Paul Oregon In Washington: Everett and Renton |
|
September 30 |
Florida |
Minimum salary requirements for overtime exemption
The federal Fair Labor Standards Act allows for exemptions from the federal overtime (and minimum wage) requirements for certain employees who work in administrative, professional and executive jobs (known as "exempt" employees).
To be considered "exempt," these employees must generally satisfy three tests. Currently, to fall within the executive, administrative and professional (EAP) employee exemptions, an employee must:
- Receive a salary, meaning they are paid a predetermined and fixed amount that is not subject to reduction because of variations in the quality or quantity of work performed (the salary-basis test);
- Receive at least a specified weekly salary level (the salary-level test); and
- Primarily perform executive, administrative or professional duties, as provided in the U.S. Department of Labor's regulations (the duties test).
Federal minimum salary requirement remains $684 per week
The minimum salary required for the EAP exemptions from overtime under federal law is $684 per week in 2026, the same as it was in 2025.
However, the U.S. Department of Labor has indicated it plans to review the rule for possible changes, which would be sought through the regulatory process. As such, employers should monitor the situation for potential developments.
States are increasing minimum salary requirements for 2026
Many states have their own salary and duties tests for determining whether an employee is exempt from overtime under state rules. Generally, employers should follow the law most protective to the employee. Consult with counsel if you have specific questions about which laws apply to your situation and how to classify your employees.
Several states will be increasing their minimum salary requirements for overtime exemption at some point in 2026.
Minimum salary changes for January 1, 2026
Five states have minimum salary requirements for overtime exemption that exceed the federal level of $684 per week and that will increase on January 1, 2026. These changes are summarized below.
|
State |
Minimum weekly salary requirement for exemption from overtime effective 1/1/2026* |
|
California** |
$1,352 per week |
|
Colorado |
$1,111.23 per week |
|
Maine |
$871.16 per week |
|
New York |
$1,275.00 per week in New York City and Nassau, Suffolk, and Westchester counties $1,199.10 per week in other areas of the state. |
|
Washington state |
$1,541.70 per week |
* The above salary thresholds apply to only certain exemptions, and the state’s duties tests must also be satisfied to be classified as exempt from overtime. Review your state rules for details. In Colorado and certain other states, an exempt employee’s salary generally must also be sufficient to satisfy the minimum wage for all hours worked in a workweek. Employers may want to consult legal counsel about how these state requirements may impact them.
* * California has adopted industry-specific minimum wage requirements for certain health care employers and fast-food restaurants that are part of a large chain. For covered employers in these two industries, the minimum salary required for exemption from overtime generally will be double the applicable industry-specific minimum wage (based on a 40-hour week). For example, covered fast-food restaurants that are part of a large chain will need to pay a salary of at least $1,600 per week (based on a $20 minimum wage) to qualify for overtime exemption to begin 2026. This is the same minimum salary required currently. More information on the minimum wage for the health care industry can be found here.
Minimum salary changes for July 1, 2026
Alaska has a minimum salary requirement for overtime exemption that is higher than the federal level, and it is scheduled to increase further on July 1, 2026.
To be classified as exempt from overtime under Alaska state law (Alaska Statute 23.10.055), bona fide administrative, professional and executive employees must receive a weekly salary that is at least twice the minimum wage for a 40-hour week and satisfy duties tests. As a result of the change in the state’s minimum wage on July 1, 2026, the minimum salary required for these exemptions under Alaska law is scheduled to increase to $1,120 per week on that date.
As noted above, California has adopted industry-specific minimum wage requirements for certain health care employers. The health care industry minimum wage is set to increase on July 1, 2026. On that date, the state’s minimum salary required for overtime exemption will also increase for employers covered by the health care industry minimum wage. For these employers, the new minimum salary will be double the new health care minimum wage that takes effect July 1, 2026 (based on a 40-hour week).
Oregon will also increase its minimum salary requirements for overtime exemption on July 1, 2026; however, it is uncertain whether these requirements will rise higher than the federal level.
To determine the weekly minimum salary requirement for exemption from overtime, Oregon uses the following formula.
- Multiply the applicable minimum wage by 2,080 and then divide by 12 and then divide by 4.3.
Oregon’s minimum wage varies depending on the region where the employee performs work. The region with the highest minimum wage under state law is the Portland Metro area, which currently stands at $16.30 per hour. This would result in a minimum salary requirement for overtime exemption that is about $27 lower than the federal level. Therefore, the federal level of $684 per week (since it is more protective of the employee) should continue to apply to virtually all employers in the state through at least June 30, 2026.
However, as mentioned above, Oregon’s minimum wage is set to be adjusted for inflation on July 1, 2026. Depending on the amount of inflation, it’s possible that the state’s minimum salary requirement for overtime exemption could rise above the federal level for some Oregon employers on July 1, 2026.
Trend #2: Leave requirements are expanding
The number of states and local jurisdictions that require employers to provide paid sick leave, paid family leave, and/or other types of leave to employees or that are amending existing laws to expand or restrict such requirements is increasing each year.
The continued changes to these laws can be especially challenging for employers who operate in more than one jurisdiction and are subject to multiple laws with differing requirements.
Paid sick leave
In 2025, there were a number of changes to paid sick leave laws to keep in mind as you head into 2026. Here are some examples:
- In the fall, Alaska published final regulations implementing the state’s paid sick leave law. The regulations address several areas that were left unaddressed or unclear by the law.
- Maine enacted legislation that clarifies the rules for carrying over unused leave under the state’s paid leave law. The clarification took effect on September 24, 2025.
- Minnesota enacted legislation that clarifies and amends aspects of the state’s paid sick leave law. For example, when an employee uses paid sick leave for more than two consecutive scheduled workdays, an employer may now require reasonable documentation that the leave is covered by the law. This change took effect on July 1, 2025. Prior to the change, the employee was required to be absent for more than three consecutive scheduled workdays before reasonable documentation could be required.
- More recently, Minneapolis, Minnesota, enacted an ordinance that will amend the city’s paid pick leave requirement to more closely align it with state law.
- Nebraska enacted legislation that made several changes to its new paid sick leave requirement.
- One of those changes was limiting the scope of the requirement to employers with 11 or more employees.
- As amended, the law requires employers with 11 to 19 employees to provide up to 40 hours of paid sick leave per year, and employers with 20 or more employees to provide up to 56 hours of paid sick leave per year.
- Employers with 10 or fewer employees aren’t required to provide sick leave.
- Oregon enacted legislation that expands the reasons an employee may use paid sick leave under its requirement to include blood donation, effective January 1, 2026.
- Philadelphia amended paid sick leave provisions related to employer coverage, rate of pay for tipped employees, and employer notices. This took effect May 27, 2025.
- Pittsburgh amended its paid sick leave requirement to require a faster accrual rate and an increased number of paid sick leave hours. The amended law will go into effect January 1, 2026.
- The state of Washington enacted legislation that amended its paid sick leave law to allow employees to use paid sick leave to prepare for or participate in a judicial or administrative immigration proceeding. This took effect on July 27, 2025. This is on top of an expansion that took place on January 1, 2025.
Paid family leave
Paid family leave programs typically provide wage replacement benefits to employees when they take time off from work for certain family or medical reasons. Many of these programs also provide job protection for eligible employees who take the paid family leave.
As of December 1, 2025, thirteen states, the District of Columbia and one city have enacted or created a mandatory paid family leave program. The states and local jurisdictions where these programs are mandatory include:
Contributions to these programs have already started in all of these locations, except Maryland (July 1, 2027) and Minnesota (January 1, 2026).
Paid family leave benefits are also being provided in all of these locations, except Delaware (January 1, 2026), Maine (January 1, 2026), Maryland, and Minnesota (January 1, 2026).
Like the paid sick leave laws, paid family leave laws continue to evolve. For example, in 2025, California, Colorado, Rhode Island and Washington were among the states making changes to their paid family leave laws.
Conclusion
As 2026 approaches, watch for developments in minimum pay and leave of absence requirements closely and review your workplace policies, practices, and training to help ensure compliance when changes occur.
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