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US Minimum Wage Changes (2026): Restaurant Pricing Checklist for Owner-Operators

A practical 2026 guide to wage-law changes for US restaurants: what changed, how to recalculate loaded labor cost, and how to update menu prices without guesswork.

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If your hourly wage assumptions are still set to last year, your menu math is already behind.

January 1, 2026 changed wage floors in many US markets. Some areas also have later effective dates this year, so waiting for an annual review is too slow for small operators.

Quick Summary

  • The U.S. Department of Labor reports 21 states and 29 localities raised minimum wages on January 1, 2026.
  • DOL also flags additional scheduled increases in 2026, including Alaska (July 1) and Florida (September 30).
  • Federal baseline is still $7.25/hour, but local rules often sit far above it.
  • A $1 hourly wage change can materially shift dish-level contribution once payroll taxes are included.

What Changed in 2026 (And Why It Matters)

1) Multiple markets changed on January 1

DOL’s state minimum wage update confirms broad changes at the start of 2026.

For multi-location operators, this means one labor model no longer works across all stores.

2) Some markets have later changes in the same year

DOL’s update highlights planned mid-year changes in some states.

If you only run a January reset, you can still get margin drift in Q3 and Q4.

3) Federal references are still the baseline, not the operating reality

  • Federal minimum wage: $7.25/hour
  • Federal tipped cash wage: $2.13/hour (subject to compliance requirements)

Most urban and suburban restaurant markets run above these numbers.

What Operators Are Saying in Communities

Recent small-business and restaurant-owner threads show two concerns:

  • Hiring and scheduling decisions are being delayed while owners wait for clarity on local wage rules.
  • Operators are unsure how much of a wage increase should flow through menu price versus portion and schedule changes.

That is exactly why you need dish-level labor math, not broad percentage guesses.

The 15-Minute Wage-to-Price Math

Step 1: Calculate loaded hourly labor cost

Use a role-level model:

Loaded hourly cost =
Base wage x (1 + FICA + FUTA + state UI + other employer on-costs)

Federal references commonly used in budgeting:

  • FICA: 7.65%
  • FUTA: 0.6% (with full credit, on eligible wage base)

Step 2: Convert labor minutes to dish cost

Labor cost per dish = Loaded hourly cost / 60 x labor minutes per dish

Step 3: Recompute contribution floor

Contribution per dish =
Menu price - ingredient cost - packaging - channel fees - labor cost per dish

If contribution falls below your floor, adjust price or operations.

Worked Example

Assume a prep-heavy bowl currently priced at $14.49.

  • Old base wage: $15.00
  • New base wage: $16.00
  • FICA + FUTA only for baseline math: 8.25%
  • Labor minutes per order: 8
Old loaded hourly = 15.00 x 1.0825 = $16.24
New loaded hourly = 16.00 x 1.0825 = $17.32
Hourly increase = $1.08
Per-order increase from labor = 1.08 / 60 x 8 = $0.14

That $0.14 looks small, but multiplied across high-volume SKUs and full payroll loads, it adds up quickly.

Weekly Checklist for Owner-Operators

  1. Verify your current minimum wage by store location (state + city/county).
  2. Recalculate loaded hourly labor by role.
  3. Recompute per-dish labor dollars for top-20 items.
  4. Reprice only items below your contribution floor.
  5. Recheck day-14 mix, complaints, and gross profit dollars.
  6. Set calendar reminders for any scheduled in-year wage changes.

Common Mistakes

  • Using one wage assumption for every location.
  • Pricing from ingredient cost only.
  • Ignoring labor minutes by item and by daypart.
  • Waiting for annual repricing while labor changes mid-year.

Sources (checked on 2026-02-14)

Frequently Asked Questions

How many places raised minimum wage in 2026?

The U.S. Department of Labor reported that 21 states and 29 localities raised minimum wages on January 1, 2026, with additional scheduled changes in some areas later in the year.

Do I need to reprice the whole menu after a wage increase?

Usually no. Recalculate labor-heavy items first, then update only the items where contribution margin drops below target.

Can I budget labor using tipped cash wage only?

That is risky. Federal and state rules still require total pay compliance, so many operators budget with a safer effective wage assumption.

What is the fastest way to update prices after wage changes?

Recompute loaded hourly labor cost, convert labor minutes to per-item dollars, and run a 14-day post-change margin check.

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