A minimum wage increase is a legal floor moving up—not a performance merit award and not a national salary-budget average. For hourly workers near the floor, the change can rewrite straight-time pay, overtime math, and the annual cash story once you multiply by real hours. This guide explains the formulas, shows how to look up jurisdiction rates on official DOL pages, and points you to the hourly raise calculator and hourly to salary calculator for conversions. It does not invent a fifty-state rate table that would go stale the next time a legislature or city council acts. For paycheck optics after any raise, see why your raise looks smaller on your paycheck. For purchasing-power context, see inflation and your real raise.

Federal floor vs state and local floors

The U.S. Department of Labor’s Wage and Hour Division summarizes the Fair Labor Standards Act (FLSA) on its FLSA wages page and minimum wage page: covered nonexempt workers are entitled to a federal minimum wage of $7.25 per hour, effective July 24, 2009. Many states—and some cities or counties—set higher minimums. DOL’s longstanding rule of thumb: when federal and state (or local) rates both apply, the employee is entitled to the higher applicable minimum wage.

How to look up jurisdiction rates (no homemade table here):

  1. Open DOL’s State Minimum Wage Laws page and note the update date on that page.
  2. Check your city or county labor site for local ordinances that may exceed the state rate.
  3. Confirm tipped-employee cash-wage and tip-credit rules separately if tips apply (DOL publishes tipped-employee state material; rules differ).
  4. Confirm whether your role is FLSA nonexempt or exempt. Exemptions are duty- and salary-based; do not assume.

Rates change. Always prefer the live DOL or state labor URL over a screenshot in a group chat.

Core hourly formulas

Let:

  • R0 = old hourly rate
  • R1 = new hourly rate after the legal floor (or employer policy) moves
  • H = hours worked in the period you care about

Straight-time increase per hour

ΔR = R1 − R0

Percent increase (same as any raise percent)

percent = (R1 − R0) ÷ R0 × 100

Weekly straight-time pay (example)

weekly = R1 × hours_in_week

Annualized straight-time pay (planning identity)

annual ≈ R1 × hours_per_week × weeks_per_year

Common planning defaults use 40 × 52 = 2,080 hours, but part-time, seasonal, and unpaid time off break that default. Enter the hours you actually expect—see also raise percentage in Excel and Google Sheets if you track scenarios in a workbook.

Model the rate change on the hourly raise calculator. Convert a steady hourly package to an annual view with the hourly to salary calculator when you need offer-letter units.

Overtime base: why the floor ripples

For covered nonexempt employees, FLSA overtime is generally due at not less than one and one-half times the regular rate for hours worked over 40 in a workweek. DOL’s Fact Sheet #23 and Fact Sheet #56A on the regular rate explain that the regular rate is derived from total weekly compensation (minus statutory exclusions) divided by hours worked, and that it may not be lower than the applicable minimum wage.

Practical planning identities when someone is paid a simple hourly rate R with overtime hours OT in a week:

overtime_rate ≈ 1.5 × R
weekly_pay ≈ (R × straight_time_hours) + (1.5 × R × OT)

When a minimum wage increase lifts R for workers paid at the floor, both straight-time and overtime lines rise. Workers already paid above the new floor may see no automatic change unless the employer also adjusts compressed differentials, next-rung rates, or union scales.

Some states impose daily overtime or different premium rules. Always read the jurisdiction’s wage order alongside federal FLSA—another reason this page refuses a single invented national overtime table.

Compression and “next rung” rates

When the floor jumps, employers sometimes raise only workers below the new minimum, leaving the next pay rung almost unchanged. That compression can shrink the reward for tenure or skill unless differentials are rebuilt. If you supervise scheduling or payroll, model:

  • Count of employees below the new floor
  • Cost to bring each to the floor
  • Optional cost to restore gaps to leads / trainers / shift differentials

Employees should ask whether a floor change came with a differential review. A statutory bump is not automatically a full scale rewrite.

Annualized hours: the silent assumption

Two people who both move from $15.00 to $16.00 per hour do not share the same annual story if one works 20 hours and the other 45 with overtime. Always write hours next to rates:

Scenario Hours assumption Rough annual straight-time at $16.00
Part-time 20 × 52 = 1,040 $16,640
Full-time default 40 × 52 = 2,080 $33,280
Full-time + OT (illustrative) 40 ST + 5 OT weekly ST $33,280 + OT depends on 1.5× rate

The table’s overtime cell is intentionally not filled with a fake “typical OT” national statistic—use your schedule.

Worked example — labeled illustration (not a jurisdiction claim)

The rates below are chosen to teach the arithmetic. They are not a claim about any state’s 2026 schedule. Replace them with the rate pair from your DOL/state lookup and your actual hours.

Plug the rate pair into the hourly raise calculator. If you need a salary-shaped number for budgeting or benefits thresholds, convert with the hourly to salary calculator using the same hour assumptions.

Tips, commissions, and regular-rate complexity

Tipped employees, piece rates, and nondiscretionary bonuses can change how the regular rate is computed for overtime. DOL fact sheets cover exclusions and inclusions; employer policies and state tip-credit rules add layers. This guide stays on the simple hourly case on purpose. If your pay mix is complex, use DOL materials and a qualified professional—do not rely on a blog shortcut.

Minimum wage increases vs merit raises vs COLA language

Lever What it answers Typical driver
Minimum wage change Legal floor for covered work Statute / ordinance
Merit raise Differentiation inside a job Performance + pool
COLA / real-pay check Purchasing power vs prices Index + policy

A floor increase can coincide with a merit cycle without being the same decision. Employers may pause discretionary bumps for workers who just received a large statutory step—or they may still run merit on top. Ask which program funded the change. National merit climate still lives on average raise percentage; do not treat a city wage ordinance as that climate.

Taxes and take-home sketches

Gross hourly math comes first. Withholding, FICA sketches, and benefit deductions can make a floor increase look smaller on the stub—the same pattern as any raise. Keep after-tax figures labeled as estimates and read why your raise looks smaller on your paycheck. Nothing on this page is tax filing advice.

Employer compliance checklist (high level)

  1. Identify the highest applicable minimum (federal / state / local) for each work location.
  2. Lift any rate below that floor by the effective date.
  3. Recompute overtime using the correct regular rate rules.
  4. Review compressed differentials if next-rung jobs lost separation.
  5. Update posters, handbook snippets, and scheduling systems.
  6. Document tip-credit and youth/training rates only where law allows.

This is educational framing, not a compliance audit.

Employee checklist

  1. Look up your jurisdiction on DOL’s state minimum wage page and any local ordinance.
  2. Confirm your new straight-time rate in writing.
  3. Estimate weekly pay with your real schedule, including likely overtime.
  4. Verify arithmetic on the hourly raise calculator.
  5. Annualize carefully with the hourly to salary calculator only after hours are honest.
  6. Ask whether differentials or next-rung rates will be reviewed.

What this page will not do

  • Publish a scraped state-by-state minimum wage table that can be wrong next month.
  • Invent “average raise by state” percents from floor changes.
  • Promise that every worker above the old floor receives the same bump.
  • Treat FLSA coverage and exemptions as trivia—duties matter.

Bottom line

A minimum wage increase changes the floor rate, then changes overtime when the regular rate moves, then changes annual cash only through the hours you actually work. Look up federal and jurisdiction rates on DOL’s FLSA and state minimum wage pages, run the math on the hourly raise calculator, and convert units with the hourly to salary calculator. Keep statutory floors separate from merit budgets on average raise percentage, and refresh every figure when the ordinance’s effective date arrives.