Beginning January 1, 2027, California’s statewide minimum wage will increase to $17.40 per hour.
The minimum wage increase also affects the minimum salary an employee must earn to meet part of the test for exemption from overtime requirements.
$17.40 x 2 x 40 hours per week x 52 weeks per year = $72,384
Accordingly, a salaried exempt employee must earn an annual salary of at least $72,384 to meet the salary threshold for exemption. In addition, employees must also satisfy the duties and other requirements applicable to the specific exemption.
Employers must also ensure compliance with Labor Code 226, including listing employees’ wage rates on their pay stubs. Remember, many California cities and counties have local minimum wage rates that are higher than the state rate. Where applicable, employers must comply with the higher local rate for hourly employees.