On January 1, 2026, minimum wage rates will increase in at least 19 states across the country. While these increases apply to all covered workers, they are especially important for restaurant workers, servers, bartenders, delivery drivers, and other tipped employees, whose pay structure differs from most hourly workers.
If you earn tips, you may hear about a “tipped minimum wage” and assume the minimum wage increase does not fully apply to you. That assumption is wrong. Even when a lower tipped wage is allowed, your employer is still legally required to ensure that you earn at least the full minimum wage by the end of each pay period.
The Big Picture for Tipped Workers in 2026
In some states, minimum wage laws allow employers to pay tipped workers a lower hourly cash wage, as long as tips make up the difference. This practice is known as a tip credit.
However, the most important rule for tipped workers is this:
No matter what your tipped hourly rate is, your total pay must equal at least the full minimum wage for every hour you work.
As minimum wages rise in 19 states on January 1, 2026, the amount your employer must ensure you earn also rises. That means:
- Higher guaranteed minimum earnings per hour
- Less ability for employers to rely on tips alone
- Greater risk of wage violations if employers fail to adjust payroll practices
States Increasing the Minimum Wage on January 1, 2026
The following states are scheduled to raise their minimum wage effective January 1, 2026, which directly affects tipped workers:
- Arizona
- California
- Colorado
- Connecticut
- Hawaii
- Maine
- Michigan
- Minnesota
- Missouri
- Montana
- Nebraska
- New Jersey
- New York*
- Ohio
- Rhode Island
- South Dakota
- Vermont
- Virginia
- Washington
Some of these states limit or prohibit tip credits, while others allow them. Regardless of the state, the legal result must always be the same: tipped workers must earn at least the full minimum wage. At the end of each pay period, your employer must pay you no less than the full minimum wage for every hour worked, not just the tipped minimum wage.
If your employer pays you the tipped hourly rate and your tips do not bring you up to the full minimum wage, your employer is legally required to cover the difference. If they do not, that may be a minimum wage violation, even if you earned good tips on other shifts.
* Regional and Local Wage Disclaimer:
Minimum wage rates may vary by location. In some states, including New York, different minimum wages apply by region, with higher rates in certain areas than others. In addition, many cities and counties set local minimum wages that exceed the state minimum. Employers are required to pay the highest applicable minimum wage based on where the work is performed.
Frequently Asked Questions for Tipped Workers
If I earn tips, does the minimum wage increase still apply to me?
Yes. Even if your employer pays a lower tipped hourly wage, you are still entitled to earn at least the full minimum wage for every hour worked. The January 1, 2026 increase raises the total amount your employer must ensure you receive.
What happens if my tips do not bring me up to the full minimum wage?
If your tips plus your hourly cash wage do not equal the full minimum wage by the end of the pay period, your employer must make up the difference. Employers cannot shift that risk onto tipped workers.
Can my employer average my tips over time to avoid paying the higher minimum wage?
No. Employers generally cannot average tips across different pay periods to meet minimum wage requirements. Each pay period stands on its own.
What Tipped Workers Should Do in 2026
As minimum wages rise, tipped workers should take a few proactive steps:
- Review your pay stubs starting January 1, 2026
- Track your hours and tips independently
- Compare your total pay to the new minimum wage
- Ask questions if your pay does not reflect the increase
As wages rise in 19 states, employers must adjust their pay practices accordingly. If they do not, tipped workers may be entitled to back pay and other remedies under federal or state law.