Minimum Wage is Increasing in California in 2026 (Employers Need to Be Prepared)

As confirmed by the California Department of Industrial Relations (DIR), the minimum hourly wage will increase in our state to $16.90 starting on January 1, 2026. It is jumping up $0.40 from the current minimum wage rate. Employers need to automatically make the change for affected employees. Here, our California employment lawyer provides a more comprehensive overview of the key things that businesses and organizations should know about the new minimum wage.

The Minimum Wage is Rising in California in 2026 

The minimum wage is set to change statewide in California. Starting on January 1, 2026, California’s state minimum wage will rise to $16.90 per hour for all employers. The figure was recently certified by our state’s Department of Finance. It is an increase of 2.49 percent that is designed to adjust for the rate of inflation. It is significant, but it is an amount that is less than the annual statewide cap of 3.5 percent or the U.S. CPI-W inflation rate. There are also sector-specific minimums that remain higher. For example, fast-food workers earn $20.00 per hour as a minimum wage in California. The health care sector minimum wage for many positions is even higher than that.

Note: The raise also bumps the salary threshold for exempt employees to approximately $70,304 per year. 

Employers Should Automatically Adjust Minimum Wage for Affected Workers

Employees are not required to give any type of notice to get their wages adjusted for the new state minimum when the calendar changes. Employers in California should proactively adjust payroll to reflect the 2026 minimum wage increase for all affected workers. Among other things, employers should review pay scales for hourly and salaried non-exempt staff, factoring in the updated exempt salary threshold, to two times minimum wage. Companies should confirm compliance with any higher local ordinances in their city or county. Also, business owners should get advice on how to adjust the “regular rate of pay” as a result of this 2026 increase. A best practice is to implement changes in advance of January 1, 2026 to ensure a smooth transition. The failure to be proactive could result in a business or organization facing liability for a minimum wage violation, wage report (pay stub) violations or other legal problems through an employee’s wage and hour claim.

Some Municipalities in California Have a Higher Local Minimum Wage

Some cities and counties in California have adopted local minimum wage ordinances that exceed the state’s rate, and these local rules take precedence for employees working within those jurisdictions. For example, San Francisco, Berkeley, Los Angeles, and several other municipalities have minimums already well above the upcoming $16.90 statewide rate. Businesses and organizations should ensure that they are in full compliance with local law.  

Speak to an Employment Lawyer for Employers in California

At Sloat Law Group, APC, our California employment attorney puts clients first. We are committed to providing proactive legal representation. If you have any questions about the new minimum wage requirements in California, please do not hesitate to contact us today. Our firm works with employers in Coachella Valley, Riverside County, and statewide in California.

Source:

dir.ca.gov/dlse/minimum_wage.htm