Highlights
Impacted Employers: Employers with employees who earn the California minimum wage, and employers with certain employees who are classified as exempt from overtime in California.
Effective Date: Jan. 1, 2026
Summary: The general minimum wage in California will increase to $16.90 per hour in 2026. The change will also affect the minimum salary generally required to be classified as exempt from overtime under state law.
Next Steps: Ensure that non-exempt employees are paid at least the new minimum wage, that exempt employees are paid at least the new minimum salary required, and that you post an updated minimum wage notice.
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The Details
The general minimum wage in California will increase from $16.50 per hour to $16.90 per hour on Jan. 1, 2026. The change is a result of an annual adjustment for inflation and will also affect the minimum salary required to be classified as exempt from overtime under state law.
Minimum Wage
Beginning Jan. 1, 2026, all non-exempt employees who work in California are entitled to a wage of at least $16.90 per hour.
The state also has separate minimum wages for fast-food workers and healthcare workers. Several local jurisdictions in the state also have their own minimum wages. If an employee is covered by both a state and a local minimum wage, you should generally comply with the rate most generous to the employee.
Employers should ensure that they display up-to-date state and local minimum wage notices.
Minimum Salary Required for Overtime Exemption
By way of background, California has exemptions from overtime for bona fide administrative, professional, and executive employees. To be exempt from overtime, these employees must meet certain state salary and duties tests.
Under one of these tests, the employee must be paid a salary of at least twice the state minimum hourly wage based on full-time employment of 40 hours per week. Since the state's minimum hourly wage will increase on Jan. 1, 2026, the minimum salary thresholds for these exemptions will also increase.
As such, for the administrative, professional, and executive exemptions from overtime under state law, employers must pay a salary of at least $1,352 per week beginning
Jan. 1, 2026.
Note: The state also adjusts the minimum salary requirements for overtime exemptions for physicians and computer professionals on an annual basis, but the state hasn’t announced these changes yet.
Next Steps
Ensure that you understand the minimum wage and minimum salary rules that apply to your employees. Additionally, be sure to post updated minimum wage notices in each work location.