Missouri Minimum Wage Rising to $15 on January 1, 2026; Tipped Wage Increasing to $7.50; Small-Business Exemptions and Overtime Standards Explained
(STL.News) Missouri Minimum Wage – Missouri will begin 2026 with one of the most significant wage adjustments in state history as the minimum wage rises to $15 per hour on January 1, 2026. The tipped employee minimum wage will simultaneously increase to $7.50 per hour, marking a major financial shift for thousands of hospitality workers across the state.
Alongside these increases, Missouri’s minimum wage law includes a vital exemption: businesses with annual gross revenue of less than $500,000 are not required to comply with the state minimum wage and instead must follow federal wage laws. This exemption covers small retailers, family-owned operations, micro-restaurants, rural businesses, and early-stage companies below the revenue threshold.
In addition to minimum wage changes, both employers and workers must also ensure they understand overtime pay requirements, which continue to apply under federal law regardless of business size or minimum wage exemption status. Overtime rules can be complex, especially when differentiating between hourly and salaried employees, and businesses must comply to avoid costly violations.
As Missouri prepares to implement these changes, the combination of new wage floors, exemptions, and overtime standards paints a detailed picture of the evolving labor landscape for 2026.
Missouri Minimum – A New Era for Missouri’s Wage Standards
Missouri Minimum Wage: The move to $15 per hour brings Missouri in line with several other states that have adopted higher minimum wages in response to rising living costs and competitive labor markets. For many workers—particularly those in service-oriented industries—the increase provides much-needed relief from inflationary pressures and stagnant wage trends that have struggled to keep pace with the cost of housing, food, transportation, and household necessities.
Workers employed by non-exempt businesses will experience an immediate pay increase beginning in the first pay cycle of 2026. For full-time workers, this change represents a substantial annual income boost at a time when economic volatility remains front of mind for many families.
Supporters of the increase argue that the $15 minimum wage will help stabilize household budgets, reduce financial strain, and encourage greater workforce participation. With stronger earnings at the entry level, many households will see improved financial flexibility and increased spending power.
Missouri Minimum Wage – Tipped Workers to Receive a Higher Base Pay
Missouri Minimum Wage: Under the updated law, the minimum wage for tipped employees will increase to $7.50 per hour, excluding gratuities. This increase affects restaurant servers, bartenders, delivery staff, hotel workers, and many other roles in which tips account for a significant portion of income.
Even though many tipped workers earn well above the minimum wage through gratuities, a higher base wage provides greater financial security during slow business periods, inclement weather, or seasonal downturns. The change also reflects the growing recognition of tipped workers as essential contributors to the labor force, whose incomes can be inconsistent with customer volume.
Restaurants, cafés, bars, and hotels are expected to adjust payroll systems accordingly. Employers must ensure that tipped employees continue to meet or exceed the full state minimum wage when combining their base wage with tips. If gratuities fall short, employers remain responsible for making up the difference—a requirement that remains unchanged despite the rate increase.
Missouri Minimum Wage – Small-Business Exemption: Who Must Follow Federal Wage Law Instead of State Law?
Missouri Minimum Wage: Although the $15 minimum wage applies broadly across Missouri, there is a significant exemption for small businesses with annual gross revenue of less than $500,000.
Who Is Exempt From the State Minimum Wage?
Businesses with less than $500,000 per year in gross revenue are exempt from the $15 state minimum.
This category often includes:
- Small family-owned retailers
- Rural convenience stores
- Boutique shops
- Micro-sized restaurants or cafés
- Seasonal operations
- Early-stage startups
- Home-based businesses
What Do Exempt Businesses Have to Pay?
These businesses must comply with federal wage laws, including:
- Federal minimum wage
- Federal tipped wage
- Federal overtime requirements
The federal minimum wage is lower than Missouri’s, meaning many workers at exempt businesses will not see the same pay increase as those employed by larger companies.
For employees, determining whether their employer is exempt is an integral part of understanding wage rights in 2026.
Missouri Minimum Wage – Overtime Pay Standards: What Missouri Workers and Employers Must Know in 2026
Missouri Minimum Wage: Regardless of whether an employer must follow Missouri’s state minimum wage or federal wage law, overtime rules apply to nearly all employees unless they are legally classified as exempt under federal law.
Federal Overtime Requirements
Missouri Minimum Wage: Under the Fair Labor Standards Act (FLSA), non-exempt employees must receive overtime pay at 1.5 times their regular rate for all hours worked over 40 in a workweek.
This requirement applies even to:
- Businesses with fewer than $500,000 in revenue
- Salaried workers who do not meet the exempt status
- Companies operating under federal wage rules
Salaried Employees Are NOT Automatically Exempt
Missouri Minimum Wage: This is a common misunderstanding in many workplaces. Being paid a salary does not eliminate overtime rights.
Who Is Exempt From Overtime?
To be exempt, employees must meet all of the following conditions:
- Salary threshold test – earning above the federal minimum salary level
- Salary basis test – receiving a guaranteed weekly salary, regardless of hours worked
- Duties test – performing exempt job duties (executive, administrative, professional, outside sales, or specific computer roles)
If any test is not met, the employee is non-exempt and must receive overtime.
Examples
- A salaried assistant manager who does not supervise employees may still qualify as non-exempt.
- A bookkeeper paid a salary but without high-level decision-making authority is likely non-exempt.
- A restaurant manager with authority to hire or fire and who meets the salary test may be exempt.
Overtime Applies Regardless of the Minimum Wage Exemption
Even small businesses under the $500,000 threshold must pay overtime according to federal law.
Failure to comply can result in back pay, penalties, and legal complications.
Missouri Minimum Wage – How Missouri Businesses Are Preparing for the 2026 Wage Change
Missouri Minimum Wage: With the new year approaching, businesses in Missouri that exceed the $500,000 revenue threshold are reviewing their entire compensation structures. Many employers, especially in competitive labor markets like St. Louis and Kansas City, already pay above the previous minimum wages due to hiring pressures.
The upcoming increase may require:
- Payroll system updates
- New hiring budgets
- Adjusted menu or product pricing
- Revised staffing schedules
- Overtime management procedures
- Training for managers on proper employee classification
By contrast, smaller businesses using the federal minimum wage may face less regulatory adjustment but still need to navigate competitive wage pressures if neighboring employers raise their starting pay to attract staff.
Missouri Minimum Wage – Economic Outlook: Expected Effects Across Missouri
The 2026 wage increase will likely ripple through the state’s economy. Higher wages generally correlate with increased consumer spending, particularly among hourly workers who devote more of their paychecks to essential goods and services.
Retailers, restaurants, and entertainment venues may see an uptick in spending as workers have more disposable income. At the same time, businesses may respond with strategic price adjustments or operational efficiencies to help offset rising labor costs.
Urban areas may transition smoothly, as wages there have already been trending higher. Rural towns may feel the changes differently, especially where small businesses make up a larger share of the local economy. However, higher household incomes in rural communities can also yield meaningful economic benefits.
Missouri Minimum Wage – What Workers Should Expect in 2026
Beginning January 1, 2026, workers should check their pay stubs to ensure:
- Their hourly rate reflects the $15 state minimum (if applicable)
- Tipped employees receive the correct $7.50 base rate
- Workers at exempt businesses receive the appropriate federal minimum wage
- Overtime pay is calculated correctly
- Job classification (exempt vs. non-exempt) accurately reflects their duties
Workers are encouraged to ask employers for clarification about wage and overtime changes as the new year begins.
Missouri Minimum Wage – What Employers Should Do Before the Deadline
To avoid compliance issues, businesses should:
- Review revenue to determine exemption status
- Update payroll and timekeeping systems
- Audit job classifications for overtime compliance
- Adjust budgets for 2026
- Notify employees of wage changes
- Train managers on wage and hour laws
Proper preparation now will reduce payroll complications later.
Missouri Minimum Wage – A Transformative Moment for Missouri’s Workforce
Missouri’s move to a $15 minimum wage and $7.50 tipped wage—combined with existing federal overtime protections—represents one of the most substantial labor updates in the state’s recent history. While small-business exemptions introduce nuance to the law, the overall impact is expected to improve earnings for a large segment of workers while helping employers build more stable workforces.
As 2026 approaches, Missouri enters a new chapter in labor policy—one shaped by higher earnings, stronger worker protections, and greater clarity around overtime and wage requirements.
PUBLISHER’S NOTE: Employees should love it, but it will kill many small businesses that are barely hanging on now. This is an inflationary action, and there will be consequences.
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