Ohio employers have a new wage rate to prepare for in 2027.
Effective January 1, 2027, Ohio's minimum wage will increase to $11.40 per hour for non-tipped employees and $5.70 per hour for tipped employees.
The new rates represent a 3.5% increase from Ohio's 2026 minimum wage of $11.00 per hour for non-tipped employees and $5.50 per hour for tipped employees.
The annual gross receipts threshold used to determine which businesses are subject to Ohio's state minimum wage is also increasing for 2027.
Here's what Ohio employers need to know and what to review before January 1.
Beginning January 1, 2027, Ohio's minimum wage rates will be:
| 2026 | 2027 | |
|---|---|---|
| Non-tipped employees | $11.00/hour | $11.40/hour |
| Tipped employees | $5.50/hour | $5.70/hour |
| Annual gross receipts threshold | $405,000 | $420,000 |
The 2027 Ohio minimum wage applies to covered employees of businesses with annual gross receipts of more than $420,000 per year.
For employees of businesses with annual gross receipts of $420,000 or less, as well as employees who are 14 or 15 years old, Ohio's constitutional minimum-wage provision ties the applicable rate to the federal minimum wage. The federal minimum wage is currently $7.25 per hour.
Ohio's annual minimum-wage adjustment is required by Article II, Section 34a of the Ohio Constitution, which Ohio voters approved in 2006.
The provision requires Ohio's minimum wage to be adjusted each year based on inflation, using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
The U.S. Bureau of Labor Statistics reported that the CPI-W increased 3.5% over the 12 months ending in August 2026, resulting in the adjustment for 2027.
This means the 2027 increase is an annual inflation adjustment under Ohio's Constitution rather than a newly enacted minimum-wage law.
Ohio's minimum cash wage for tipped employees will increase from $5.50 to $5.70 per hour on January 1, 2027.
Under Ohio's Constitution, an employer may pay an eligible tipped employee less than the full state minimum wage, but not less than half of the applicable minimum wage, when the employer can demonstrate that the employee's wages and tips together equal or exceed the required minimum wage.
Employers using a tip credit should also remember that federal and state requirements can apply. When state and federal wage laws differ, employers generally must follow the standard that provides the greater protection to the employee.
For 2027, Ohio's $11.40 minimum wage applies to covered employees of businesses with more than $420,000 in annual gross receipts.
That threshold is increasing from $405,000 in 2026.
The gross receipts threshold is adjusted annually along with the minimum wage, so employers near the threshold should review their annual gross receipts rather than assuming their wage obligations will remain the same from one year to the next.
Employers should also consider whether federal wage-and-hour requirements apply to their workforce. The interaction between state and federal law can vary based on the employer and employee.
Employers subject to Ohio's minimum-wage law must make the state-approved wage-and-hour summary available to employees.
Ohio law allows employers to satisfy the posting requirement by displaying the summary in a conspicuous and accessible location at the workplace or online in a manner accessible to employees.
The Ohio Department of Commerce is required to update the summary as necessary, and at least annually, to reflect changes in the state's minimum wage.
Employers should make sure employees have access to the updated 2027 Ohio Minimum Wage information when the new rate takes effect.
Employers should use the next few months to prepare for the change rather than waiting until the first payroll of 2027.
Consider reviewing:
Employee pay rates. Identify employees currently earning below $11.40 per hour who will be covered by the new rate.
Tipped employee rates. Review applicable cash wages and tip-credit practices before the tipped rate increases to $5.70.
Payroll settings. Schedule required rate changes to take effect for work performed on or after January 1, 2027.
Gross receipts. Determine whether your organization falls above the new $420,000 annual gross receipts threshold.
Employee communication. Make sure managers and affected employees understand any upcoming pay-rate changes.
Required wage information. Update the Ohio wage-and-hour summary available to employees for 2027.
Recordkeeping. Confirm that payroll and time records accurately reflect employee pay rates and hours worked.
Ohio employers are generally required to maintain certain wage-and-hour records, including employees' pay rates, hours worked and amounts paid, for at least three years.
Ohio's minimum wage will be $11.40 per hour for covered non-tipped employees beginning January 1, 2027.
The new Ohio minimum wage takes effect January 1, 2027.
The minimum cash wage for covered tipped employees will be $5.70 per hour beginning January 1, 2027, subject to applicable tip-credit requirements.
The non-tipped minimum wage is increasing by $0.40 per hour, from $11.00 to $11.40. The tipped minimum cash wage is increasing by $0.20 per hour, from $5.50 to $5.70.
Ohio's state minimum wage will apply to covered employees of businesses with more than $420,000 in annual gross receipts in 2027, up from $405,000 in 2026.
Under Ohio's constitutional minimum-wage provision, employees of businesses with annual gross receipts of $420,000 or less are subject to the federal minimum-wage rate. The federal minimum wage is currently $7.25 per hour.
Under Ohio's constitutional provision, employees under age 16 are subject to the federal minimum wage rather than Ohio's inflation-adjusted state rate. The federal minimum wage is currently $7.25 per hour.
Ohio's Constitution provides for an annual adjustment based on inflation. The adjustment uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) and takes effect January 1.
January may still be a few months away, but wage changes can affect more than an employee's hourly rate. Employers may need to update payroll settings, review tipped employee practices, communicate changes and make sure required wage information is available to employees.
Preparing now can help avoid payroll corrections and wage-and-hour issues after the new rate takes effect.
CTR Payroll | HR helps employers simplify payroll and workforce management while staying informed about changes that affect their workforce. If you have questions about updating employee pay rates or preparing your payroll for 2027, contact CTR Payroll | HR.
This information is provided for general informational purposes only and is not intended as legal advice. Employers should consult qualified legal counsel regarding their specific compliance obligations.
CTR Payroll | HR combines one powerful Workforce Capital Management (WCM) platform with the dedicated human expertise employers deserve.
Manage payroll, HR, benefits, time and labor, talent and workforce management in one connected experience, powered by technology that continues to evolve with the way people work.
ONE PLATFORM · FORWARD-THINKING TECHNOLOGY · COMPLIANCE EXPERTISE · DEDICATED HUMAN SUPPORT
Every CTR client has a Dedicated Support Representative who knows their business, backed by experienced payroll, HR, tax and compliance specialists when deeper expertise is needed.
Headquartered in Pittsburgh and serving employers nationwide, CTR is a third-generation, family-owned company that has been helping organizations evolve with the workplace since 1964.
Ready to experience the CTR Distinction?
Stay Ahead of What's Next
Explore upcoming events, webinars and practical resources designed to help employers navigate HR, payroll, compliance, technology and the changing workplace.