Minimum Wage Goes Up January 1, 2027. Here's What It Does to Your Cleaning Contracts.
By Ludovic Martin, Co-Founder, taskforse · Last updated: November 2, 2026
On January 1, 2027, the minimum wage goes up in Washington, California, Michigan and more than a dozen other states. For a cleaning company, where labor is most of the price, that raise lands straight on every contract. On a typical 60,000 sq ft office cleaned five nights a week, a 60-cent raise adds about $217 a month in labor. If the price does not move, that comes out of your margin.
This article covers where the wage goes up, what it adds to an account in dollars, how to pass it through without losing the client, and what a property manager should expect to see.
Key takeaways
- Washington rises to $17.73, California to $17.40 and Michigan to $15.00 on January 1, 2027. The federal minimum stays at $7.25.
- In Canada, Ontario went to $17.95 on October 1, 2026, and Québec reviews its $16.60 rate on May 1, 2027.
- A raise costs you the raise plus payroll burden: at 25% burden, every $1 of wage is $1.25 of cost.
- On about 289 hours a month, a $0.60 raise is $217 a month. Left unpriced, a 25% margin drops to about 22%.
- The time to send notice is now: a clause with 30 or 60 days' notice needs a letter in early November to land on January 1.
Where does the minimum wage go up on January 1, 2027?
In more than a dozen states. Payroll guides count between 14 and 16 states with increases on January 1, and several more adjust automatically for inflation each year. Three of the largest, from official announcements:
| Where | New minimum | Effective | Source |
|---|---|---|---|
| Washington | $17.73 an hour (from $17.13) | Jan 1, 2027 | Washington L&I |
| California | $17.40 an hour (from $16.90) | Jan 1, 2027 | Governor of California |
| Michigan | $15.00 an hour (from $13.73) | Jan 1, 2027 | US Department of Labor |
| Ontario | $17.95 an hour (from $17.60) | Oct 1, 2026 | Government of Ontario |
| Québec | $16.60 an hour | Since May 1, 2026; next review May 1, 2027 | CBC News |
The federal minimum stays at $7.25, according to the Department of Labor. Cities and counties often set their own, higher rates, so check the local rate where each building sits, not only the state's.
What does a raise add to one cleaning contract?
More than the raise itself, because payroll burden rides on top of every wage dollar: payroll taxes, workers' compensation and benefits. The taskforse bid calculator defaults to 25% burden, so each $1 of wage costs $1.25.
Take the same account we priced in day porter vs night crew: 60,000 sq ft of general office, cleaned five nights a week at 4,500 sq ft an hour, which is about 289 labor hours a month. At the calculator's defaults ($17.25 wage, 25% burden, 25% margin, supplies at 13% of the price) it sells for about $9,540 a month.
| Raise per hour | Extra labor cost | Per year | Margin if the price stays the same | Price to keep a 25% margin |
|---|---|---|---|---|
| $0.50 (California) | $180 a month | $2,165 | 22.8% | +$277 a month (2.9%) |
| $0.60 (Washington) | $217 a month | $2,598 | 22.4% | +$332 a month (3.5%) |
| $1.27 (Michigan) | $458 a month | $5,499 | 19.5% | +$702 a month (7.4%) |
Two things in that table matter more than they look. A 60-cent raise takes about two and a half points of margin, and small commercial operators typically clear 10% to 20% net after overhead (see why janitorial bids lose money), so two and a half points is a large share of the profit. And the Michigan step is big enough that leaving it unpriced for a year costs more than $5,000 on one account.
The figures above assume your cleaners are paid at the minimum. If they earn more, the raise may not touch them directly, but read the next section.
Does it matter if your cleaners already earn above the minimum?
Usually, yes, because of wage compression. When the minimum rises, the gap between a new hire and someone with two years in shrinks or disappears, and the experienced cleaner notices. Most companies end up raising the people just above the minimum too, to keep the ladder.
There is no published rule for how far up that ripple goes. As an operator rule of thumb, to check against your own payroll: count everyone within about a dollar of the new minimum as affected. That is usually where the complaints start.
Can you raise the price mid-contract?
It depends on what you signed.
With an escalation clause. Some janitorial contracts carry one, tied either to the consumer price index or to changes in the law, often with a cap and a notice period. If yours names a minimum wage change as a trigger, the increase follows its rules. Read the notice period now: a clause that needs 60 days' notice for a January 1 increase needs your letter in the client's hands by early November.
Without one. A mid-contract increase is a request, and the client can say no. That does not mean you should not ask, but it changes how you ask: early, with the arithmetic, and framed as a cost the law imposed rather than a price you chose. If they decline, it goes into the renewal, and it is worth reading how to keep a cleaning contract at renewal before that conversation.
On every new bid from today. Price next year's wage, not this year's. A three-year contract signed in November at a 2026 wage is underwater from its second month. The full method is in how to bid a commercial cleaning contract.
How do you ask a client for the increase?
Keep it short, specific to the account, and show the working. A property manager can say yes to arithmetic. A vague "rising costs" letter invites a rebid.
What the letter should contain:
- The reason, in one line. "The minimum wage in Washington rises from $17.13 to $17.73 on January 1, 2027."
- The account's numbers. Hours per month on their building, the raise, the burden, the monthly result.
- The new price and the date. Matching the notice the contract requires.
- What does not change. Same scope, same crew, same schedule.
On the 60,000 sq ft example, a cost-only pass-through is about $217 a month, or 2.3% of the price. Keeping the full 25% margin is $332 a month, or 3.5%. Many owners ask for the cost and absorb the rest on accounts they want to keep, because a request the client can check in a minute is the one that gets approved. Either way, avoid a flat percentage across every account: it overcharges some clients, undercharges others, and cannot be explained line by line.
What should property managers expect?
An increase in January from your cleaning contractor is normal this year, and a fair one is easy to recognize.
- It names the law and the rate. Which minimum wage, from what to what, on what date.
- It shows your building's hours. The increase should scale with the labor on your account, not with your total invoice.
- It is in the range the arithmetic gives. On a typical night-cleaning contract, roughly 2% to 5% of the monthly price for raises between 50 cents and $1.27.
- It follows the contract. If there is an escalation clause, it uses its formula and notice. If there is not, it arrives as a request with time to discuss.
A contractor who absorbs the whole raise to avoid the conversation is not doing you a favor. The margin has to come from somewhere, and it usually comes from hours on your building.
taskforse is building software that prices every account from its own hours, wages and burden, so a wage change becomes a number you can send the same day. If you are working this out in a spreadsheet tonight, join the waitlist.
Frequently asked questions
- Which states raise the minimum wage on January 1, 2027?
- Washington goes to $17.73 an hour, California to $17.40 and Michigan to $15.00, among others. Payroll guides count between 14 and 16 states with increases on that date, and several more adjust automatically for inflation. The federal minimum stays at $7.25. Check your own state's labor department for the final rate.
- How much does a minimum wage increase add to a cleaning contract?
- Multiply the raise by your payroll burden and by the hours on the account. On a 60,000 sq ft office cleaned five nights a week, about 289 hours a month, a $0.60 raise with 25% burden adds about $217 a month in labor, or $2,600 a year.
- Can a cleaning company raise its price in the middle of a contract?
- Only if the contract allows it. With an escalation clause that covers wage changes, the increase follows its rules and notice period. Without one, a mid-contract increase is a request the client can refuse, so the honest path is to ask early, show the arithmetic, and otherwise build it into the renewal.
- What is a fair price increase for a property manager to accept?
- One that covers the actual change in labor cost on that account and shows its working: hours, the raise, the payroll burden. On a typical night-cleaning contract that is roughly 2% to 5% of the monthly price, depending on the size of the raise. A flat percentage across every account, with no arithmetic behind it, deserves a question.
- What is wage compression?
- When the minimum rises, people already paid a little above it close the gap, so they expect a raise too. A cleaner at $17.75 next to a new hire at $17.73 will notice. Compression means the real cost of an increase is often higher than the minimum-wage workers alone.