State Labor Law Changes Taking Effect January 1, 2027
On January 1, 2027, minimum wages rise in at least eight states, exempt salary thresholds move in California, Washington, Maine and Colorado, Maryland starts collecting paid family and medical leave contributions, Connecticut's paid sick leave reaches every employer with one employee, Colorado's rewritten AI law and California's automated decision rules take effect, and California bars emotion-reading surveillance and bathroom monitoring. New York's minimum wage does not rise, because the state's inflation off-ramp was triggered. Several changes that competitor roundups put on January 1 actually land later in 2027: Connecticut's AI disclosure duty on October 1, Delaware's pay transparency law on September 26, Washington's non-compete ban on June 30.
This roundup lists each change with its citation, effective date and the one thing an employer must do about it, grouped by category, from state agency pages and the enacted laws read in October 2026, with law firm summaries where the agency page was unavailable. Items whose details were not confirmed on a primary page are marked so you can check them before acting.
Minimum wages and exempt salary thresholds
The rates are on our minimum wage by state 2027 page and the thresholds on our exempt salary thresholds 2027 page. The January 1 movers that affect payroll setup:
- California: minimum wage $17.40, certified by the Department of Finance on July 31, 2026; exempt salary $72,384 a year (two times the minimum wage); computer professional exemption $61.03 an hour or $127,108.34 a year, announced October 16, 2026.
- Washington: minimum wage $17.73, announced by Labor and Industries September 30, 2026; exempt salary $92,196 at employers with 51 or more employees (2.5 times the minimum wage) and $82,976.40 at 50 or fewer (2.25 times); hourly computer professionals $62.06.
- Colorado: minimum wage $15.71, announced August 13, 2026; the exempt threshold in the proposed 2027 PAY CALC Order is $59,864, pending adoption of the final order in December.
- Maine: minimum wage $15.70; exempt salary about $47,101 a year under the state's formula, which is not a simple multiple of the minimum wage.
- New Jersey, Michigan, Rhode Island and Virginia raise their minimum wages on January 1; the figures are on the rates page.
- New York: no change. The Department of Labor confirmed that the 2027 inflation increase will not take effect because the statutory off-ramp was triggered; rates stay at $17.00 in New York City, Long Island and Westchester and $16.00 elsewhere. The governor has proposed legislation for $17.60 and $16.55 from March 1, 2027, which requires the Legislature's approval. Exempt salary thresholds, which are tied to those rates, also stay at $1,275 and $1,199.10 a week unless the law changes.
- Federal: $7.25 and the $684-a-week exempt threshold are unchanged. The Department of Labor formally removed the vacated 2024 overtime rule from the regulations on May 15, 2026.
Paid leave
| State | Change | Citation | Employer duty |
|---|---|---|---|
| Maryland | Family and Medical Leave Insurance contributions begin January 1, 2027 at 0.9% of wages, split equally between employer and employee; employers with fewer than 15 employees remit only the employee half. Benefits become payable no later than January 3, 2028. | HB 102 (2025), Chapter 363; Maryland Department of Labor | Register, start deductions on the first 2027 payroll, remit quarterly |
| Massachusetts | Paid Family and Medical Leave: total contribution stays 0.88% for employers of 25 or more, but the employer's minimum 60% share moves from the medical to the family portion; maximum weekly benefit rises from $1,230.39 to $1,284.61 | Chapter 101 of the Acts of 2026 | Re-code the split before the first 2027 payroll |
| Colorado | FAMLI premium falls from 0.88% to 0.86% of wages | Division announcement, October 6, 2026 (confirm on the FAMLI site) | Update the rate |
| Minnesota | Paid Leave premium stays 0.88% for 2027, employer may deduct up to 0.44% from employees | Department of Employment and Economic Development, July 31, 2026 | No rate change; confirm the split |
| Connecticut | Paid sick leave extends to employers with one or more employees, the final phase of the 2024 law: one hour per 30 worked up to 40 hours a year, usable after 120 days | Public Act 24-8 | Begin accrual for every employee; show hours on pay records |
| Washington | Paid Family and Medical Leave job-restoration rights extend to employers with 15 or more employees, from 25 | 2025 amendments (confirm the section) | Update leave policies and return-to-work handling |
| California | Bereavement leave extends to a designated person | SB 1149 | Update the leave policy |
| San Francisco | Paid Parental Leave Ordinance qualifying period shortened for large employers | Ordinance amendment | Update eligibility |
Alaska's paid sick leave has been in force since July 1, 2025 and Nebraska's since October 1, 2025, with small employers exempted by a later amendment; Missouri repealed its voter-approved law effective August 28, 2025. Our paid sick leave laws by state page carries the full table.
AI and automated decisions
- Colorado SB 26-189, signed May 14, 2026, repeals the 2024 Colorado AI Act and replaces it with duties on anyone who uses automated decision-making technology to materially influence an employment decision: a clear notice before use, a plain-language explanation within 30 days of an adverse outcome, a route to correct data and request meaningful human review, and three years of records. It applies to decisions made on or after January 1, 2027. A federal court order in x.AI's challenge to the prior law limits enforcement until after the Attorney General finalizes rules and rules on an injunction motion, so the duties exist on paper from January 1 while enforcement is held. Our Colorado AI Act for employers guide quotes the enacted sections.
- California CCPA automated decision-making regulations (11 CCR 7200 and following): businesses subject to the CCPA that use automated decision-making technology for significant decisions, including hiring, promotion, pay and termination, must give a pre-use notice, offer an opt-out or human appeal, and honor access requests from January 1, 2027. Risk-assessment deadlines are phased separately.
- California SB 951: Cal-WARN notices must state whether technology displacement contributed to a layoff, with a $500-a-day penalty, from January 1, 2027.
- California SB 947, the "No Robo Bosses" law requiring human corroboration before an automated system is used to discipline or dismiss, takes effect July 1, 2027, not January 1.
Our AI hiring laws by state table puts these beside Illinois, New York City, Texas and Connecticut.
Monitoring and privacy
- California AB 1883 bars workplace AI surveillance that infers emotional state or collects neural data, with a $500 penalty per violation, from January 1, 2027. The governor asked for clarifying legislation in 2027, so expect amendments.
- California AB 1331 prohibits monitoring in workplace bathrooms and similar areas from January 1, 2027.
- Connecticut Public Act 26-73, the expanded electronic monitoring notice law with location-specific notices and a new-hire statement, took effect October 1, 2026 and is already in force; our Connecticut monitoring law guide has the notices.
- New York's Trapped at Work Act, restricting mandatory captive-audience and related practices, has an effective date reported as either December 19, 2026 or February 13, 2027 depending on the source; check the chaptered law.
Pay transparency and pay data
- California pay data reporting expands for the 2026 reporting year with job categories rising from 10 to 23, affecting the May 2027 reports.
- Columbus, Ohio begins enforcing its pay transparency ordinance on January 1, 2027.
- Delaware's pay range posting law (HS 2 for HB 105, signed September 26, 2025) takes effect September 26, 2027, for employers with more than 25 employees, with a warning for a first violation and penalties to $10,000 after. It is a 2027 change but not a January one. Our pay transparency laws by state page tracks it.
Non-competes and stay-or-pay contracts
- California AB 1697 amends the 2025 stay-or-pay law so its restrictions apply to contracts entered on or after January 1, 2027, with new exceptions and damages of the greater of actual loss or $5,000.
- Washington ESHB 1155, a near-total ban on non-competes signed March 23, 2026, takes effect June 30, 2027, with written notice to affected employees due by October 1, 2027. Not a January change.
Other state mandates
| State | Change, January 1, 2027 | Citation |
|---|---|---|
| Illinois | Paid jury duty at the regular rate for employers with more than 25 employees | HB 4844, Public Act 104-0683, signed July 31, 2026 |
| Illinois | No driver's license requirement in job postings unless driving is an essential function and a business necessity | HB 4758 |
| Illinois | Menopause accommodation and posting duties added to the Human Rights Act | Menopause Equity and Care Act |
| Washington | Fair Chance Act restrictions on criminal history inquiries extend to employers with fewer than 15 employees | HB 1747 |
| California | Civil penalties up to $10,000 for immigration-related retaliation; FEHA definition of sex updated | AB 2495; AB 2563 |
| Connecticut | Written notice of disability accommodation rights to all existing employees by January 29, 2027 | Public Act 26-12 |
| Philadelphia | Fair Practices Ordinance adds menstruation and menopause protections | City ordinance |
| Colorado | Agricultural overtime threshold steps down again | Agricultural Labor Rights and Responsibilities Act schedule |
The federal position
The federal minimum wage, the $684 exempt threshold and the $107,432 highly compensated threshold are unchanged for 2027, and overtime was not on the Department of Labor's spring 2026 regulatory agenda. The federal change that reaches every payroll is on the tax side: the 2026 W-2 carries new codes for the overtime premium and reported tips under the 2025 reconciliation law, the 1099 threshold is $2,000, and the Social Security wage base is $192,300. Our year-end payroll checklist has the dates. The status of the federal independent contractor rule, the tipped-wage litigation and Form I-9 changes was not confirmed for this page and should be checked on the Department of Labor and USCIS sites.
Changes that land later in 2027
- March 1: New York minimum wage increase, if the Legislature adopts the governor's proposal.
- June 30: Washington non-compete ban.
- July 1: Alaska minimum wage $15.00 and exempt salary $62,400; California SB 947 human-corroboration rule; Oregon and Nevada annual minimum wage adjustments; Utah's AI disclosure law sunsets.
- September 26: Delaware pay range posting.
- September 30: Florida minimum wage $15.00, the final step of the 2020 amendment.
- October 1: Connecticut AI disclosure and adverse-decision explanation duties under Public Act 26-15; Washington non-compete notices due.
- January 3, 2028 at the latest: Maryland paid leave benefits begin.
What to do before December 31
- Load the new minimum wages and exempt thresholds for every state where you have employees, and move anyone under the new California or Washington salary floor to non-exempt timekeeping from the first January shift.
- Register for Maryland FAMLI if you have Maryland employees and set the 0.45% deduction; re-code the Massachusetts split; update the Colorado rate.
- Start Connecticut sick leave accrual for every employee and add the hours to pay statements.
- Inventory any tool that scores, ranks or filters candidates or employees for Colorado and California exposure, and draft the pre-use notice and adverse-outcome letter; our AI use policy template has the clause.
- Check camera and monitoring placements against California's bathroom and emotion-inference bans, and reissue the Connecticut notices if you have not since October 1.
- Send Connecticut's disability accommodation notice by January 29, and update Illinois postings and job advertisements.
- Diary the later dates above, especially Washington's June 30 non-compete ban and Connecticut's October 1 AI duties.
Key takeaways
- January 1, 2027 brings minimum wage increases in California ($17.40), Washington ($17.73), Colorado ($15.71), Maine ($15.70), New Jersey, Michigan, Rhode Island and Virginia, and no increase in New York, where the inflation off-ramp froze rates at $17 and $16.
- Exempt salary floors move to $72,384 in California and $92,196 at Washington employers with 51 or more staff; the federal $684 a week is unchanged after the 2024 rule was formally removed in May 2026.
- Maryland's paid family and medical leave contributions start at 0.9% of wages; Massachusetts shifts its employer share to family leave; Connecticut's paid sick leave reaches employers with one employee.
- Colorado's rewritten AI law (SB 26-189) and California's CCPA automated decision rules apply from January 1, 2027; California also bans emotion-inferring surveillance (AB 1883) and bathroom monitoring (AB 1331).
- Not January 1: Connecticut's AI disclosure duties (October 1, 2027), Delaware pay transparency (September 26, 2027), Washington's non-compete ban (June 30, 2027), California SB 947 (July 1, 2027).
- Illinois adds paid jury duty for employers over 25, bars driver's license requirements in postings without necessity, and adds menopause accommodations; Washington extends its Fair Chance Act to employers under 15.
Frequently asked questions
Which states raise the minimum wage on January 1, 2027?
California to $17.40, Washington to $17.73, Colorado to $15.71, Maine to $15.70, and New Jersey, Michigan, Rhode Island and Virginia under their schedules, with other indexed states announcing through the autumn. New York does not raise its rate on January 1, 2027. The full table is on our minimum wage by state 2027 page.
Is New York's minimum wage going up in 2027?
Not on January 1. The New York State Department of Labor confirmed that the inflation increase will not take effect because the statutory off-ramp was triggered, leaving rates at $17.00 in New York City, Long Island and Westchester and $16.00 elsewhere. The governor has proposed legislation for $17.60 and $16.55 from March 1, 2027, which needs legislative approval.
When do Maryland paid family leave contributions start?
January 1, 2027, at 0.9% of wages split equally between employer and employee, under HB 102 of 2025. Employers with fewer than 15 employees remit only the employee half. Benefits become payable no later than January 3, 2028.
When does the Colorado AI Act take effect?
SB 26-189 applies to consequential decisions made on or after January 1, 2027, requiring notice, a 30-day explanation after an adverse outcome, data correction, meaningful human review and three years of records. A federal court order limits enforcement until after the Attorney General finalizes rules and the court rules on an injunction motion.
Does the CCPA automated decision rule apply to employers?
Yes. Businesses subject to the CCPA that use automated decision-making technology for significant decisions, including hiring, promotion, pay and termination, must provide pre-use notice, an opt-out or human appeal and access rights from January 1, 2027.
Which paid sick leave law expands on January 1, 2027?
Connecticut's. The final phase of Public Act 24-8 extends paid sick leave to employers with one or more employees, at one hour per 30 worked up to 40 hours a year, usable after 120 days of employment.
What is the federal exempt salary threshold in 2027?
$684 a week, $35,568 a year, with the highly compensated threshold at $107,432. The 2024 increase was vacated in November 2024 and the Department of Labor removed it from the regulations on May 15, 2026. California, Washington, Colorado, Maine, Alaska and New York set higher state floors.
Which 2027 employment law changes are not on January 1?
Connecticut's AI disclosure duties (October 1, 2027), Delaware's pay range posting law (September 26, 2027), Washington's non-compete ban (June 30, 2027), California's SB 947 human-corroboration rule (July 1, 2027), Alaska's minimum wage and exempt threshold (July 1, 2027) and Florida's $15 minimum wage (September 30, 2027).