As businesses plan for 2027, many employers are balancing employee expectations with rising operating costs. National compensation forecasts suggest pay increases will remain relatively steady, making thoughtful planning important for the year ahead.
According to SHRM's report on 2027 salary increase projections, employers are anticipating modest pay increases as they manage budgets and compete for talent.
Rather than giving every employee the same raise, businesses may focus on performance, retention, market competitiveness and hard-to-fill positions when allocating compensation budgets.
There is no general federal requirement to give employees an annual raise. However, employers must comply with applicable minimum-wage laws and other wage requirements. The U.S. Department of Labor's guidance on when pay raises are required provides additional information.
Effective January 1, 2027, Ohio's minimum wage will increase to $11.40 per hour for eligible non-tipped employees and $5.70 per hour for eligible tipped employees. According to the Ohio Department of Commerce, the annual gross-receipts threshold for businesses covered by the state's minimum-wage rates will also increase.
Beginning January 1, 2027, the state minimum wage will apply to businesses with annual gross receipts over $419,000, up from the current $405,000 threshold. For businesses with annual gross receipts of $419,000 or less, as well as workers ages 14 and 15, the minimum wage remains tied to the federal rate of $7.25 per hour.
Ohio employers are also required to display the official 2027 minimum-wage poster. Visit the Ohio Department of Commerce's minimum-wage poster page to access the updated poster.
As you prepare your 2027 compensation plan, consider these steps:
Pay increases are only one part of employee retention. A thoughtful approach to compensation can help businesses balance budgets, meet wage requirements and support their workforce.
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