On July 31 Governor Newsom announced that California’s statewide minimum wage will increase to $17.40 per hour, effective January 1, 2027.
This will impact both exempt and non-exempt employees in California, as the minimum salary threshold for exempt employees is tied to the minimum wage. Accordingly, as of January 1, 2027, the minimum annual salary for most exempt employees in California will be $72,384 per year.
Employers with California employees should ensure that all exempt employees meet this new minimum requirement.
This may also be a good time to review overtime classifications more broadly to ensure employees meet not only the salary component for exempt status, but also an applicable duties test, both in California and in all other states in which they have employees.