State Minimum Wage Increase
On January 1, 2026, California’s state minimum wage will increase by 40 cents per hour, to $16.90 per hour. This adjustment is a 2.49% increase based on federal inflation data (the U.S. Consumer Price Index for Urban Wage Earners and Clerical Workers). Employers with workers at or near the current minimum wage should plan accordingly, to ensure wages stay above the minimum. In addition, exempt workers’ salaries must also be adjusted to at least double the state minimum wage. The minimum salary for workers classified as exempt will rise to $70,304 per year ($5,858.67 per month) on January 1.
Health Care Workers Minimum Wage Increases
Employees who provide health care services or support the provision of health care, and who work at covered facilities, are covered by the Health Care Minimum Wage law. Those rates just increased effective July 1, 2025 through June 30, 2026. Salaried exempt health care workers must earn a salary equal to either (a) one and a half times the applicable health care rate (which currently range from $18.63 to $24/hr depending on facility) or (b) double the state minimum wage, whichever is greater. The January 1 state minimum wage will not immediately trigger an adjustment for exempt health care workers. But, on July 1, 2026, double state minimum wage ($33.80/hr) will exceed 1.5 times health care minimum wage ($33.00) for certain facilities. So, exempt workers at those facilities, such as intermittent and community clinics and covered health care facilities not listed in the other categories and not run by Counties who are earning less than $70,304 per year ($5,858.67 per month) will require a salary adjustment on July 1. The DLSE’s chart of health care minimum wages can be found here.
Fast Food Workers – No Change for 2026
Fast food restaurant employees at large chains have a separate minimum wage rate, $20/hour. This rate is not set to increase on January 1, 2026. However, exempt fast food employees (such as managers) must earn double the fast food worker rate ($40/hour, or $83,200 per year). To qualify as exempt, covered fast food employees must make two times the fast food minimum wage, so these salaries do not currently require adjustment.
Local Minimum Wage Adjustments
Local minimum wage increases exceeding the state minimum wage took effect on July 1, 2025. These increases include the city of Alameda ($17.46), Berkeley ($19.18), Emeryville ($19.90), Fremont ($17.75), the City of Los Angeles ($17.87), the County of Los Angeles ($17.81), Milpitas ($18.20), Pasadena ($18.04), San Francisco ($19.18), and Santa Monica ($17.81). In addition, hotel workers in the City of Los Angeles and Santa Monica ($21.01), as well as hotel workers in Glendale ($22.50), Long Beach ($25.00) and West Hollywood ($20.22) just received a pay increase. However, a referendum petition has been filed against the amendment to the LA hotel worker increase, which has resulted in suspension of the increases in LA and Santa Monica (minimum wage for hotel workers is tied to the LA City rate). If the petition is certified, then the ordinance will remain suspended unless City of LA voters vote to approve it.
Other cities, including West Hollywood, San Carlos, and many Bay Area cities (including Santa Rosa, Belmont, Burlingame, Cupertino, Daly City, Foster City, Hayward, Novato and others), are scheduled for increases on January 1, 2026, which have yet to be announced.
The City of Malibu has suspended its planned July 1 increase to support businesses impacted by the Palisades fire.
Employers with workers in these locations should regularly check their city/county websites as the new year approaches.