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California employers should begin their New Year's preparations now, as minimum wage increases are set to take effect on January 1, 2026.
For most employees, the minimum wage will rise from $16.50 an hour to $16.90 due to California Labor Code Section 1182.12 (c), as California's Department of Finance issued its annual notice on August 1, 2025. This increase makes California's the second highest minimum wage in the country, directly behind the District of Columbia.
While the $16.90 minimum wage will apply to most employees in the state, there are certain exceptions.
Many localities across California also have a minimum wage that already exceeds $16.90, including but not limited to Los Angeles and San Francisco at $17.87 per hour and $19.18 per hour, respectively.
Fast food workers in California are also entitled to $20 per hour and certain healthcare workers are entitled to $21-$25 per hour.
What This Means for California Employers
Employers should immediately review their payroll practices for hourly employees to ensure they are prepared to provide the new rates commencing on January 1.
Under California wage laws, the increase in minimum wage will also cause the minimum salary for certain exempt employees to increase. Employees must earn two times the state's minimum wage for full-time work, making the new minimum salary $70,304 from $68,640 per year (an increase of $1,664).
For More Information
If you have any questions about this Alert, please contact Brian L. Johnsrud, Katherine C. Huibonhoa, Annabel Pollioni, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
