California officials have announced that the statewide minimum wage will increase for all employers to $16.90 on January 1, 2026, as required by the state’s annual inflation-based adjustment process.Â
California law mandates annual minimum‑wage adjustments tied to inflation, capped at 3.5%. For 2026, the Department of Finance has certified a 2.49% increase, raising the statewide minimum to $16.90 per hour for all employers as of January 1, 2026. This places California’s minimum wage as the second-highest nationally, trailing only the District of Columbia.
Here are some key considerations and points for action for employers. Questions regarding these or any other employment matters? Contact the experienced counsel at MNK Law, by telephone at 562.362.6437, or via e-mail at info@mnklawyers.com.
Key Considerations for Employers
- Universal applicability
The new minimum wage rate applies to all private-sector employers, regardless of size. - Exempt-salary threshold also raises
Employers must also ensure that exempt employees meet the increased salary basis as well. For 2026, the salary threshold jumps to $5,858.67/month or $70,304/year. - Local mandates and special industries
Some cities (like Los Angeles, Milpitas, San Francisco, Emeryville) enforce higher local wages, which must be honored if they’re more stringent than the state rate. Additionally, pay for employees in fast-food or healthcare must reflect those industries’ specific higher minimums. A list of city and county specific minimum wages is maintained at Inventory of US City and County Minimum Wage Ordinances – UC Berkeley Labor Center.
Points of Action for Employers
- Update payroll systems
Employers should program their payroll systems to reflect the $16.90/hr rate and adjust overtime and premium pay calculations accordingly. Don’t forget to update those rates regarding meal period premiums, tool reimbursements, piece rates, and exempt salary basis. - Conduct a wage audit
Review your payroll to ensure both hourly and exempt employees are being compensated in compliance with the new state and any applicable local or industry-specific rates. - Train HR and payroll staff
Ensure your team understands how the increase impacts overtime eligibility, wage statements, and paystub accuracy. HR staff should continue to monitor any developments regarding wages. - Revise written policies and postings
Update internal handbooks, employee notices, and required labor law posters to reflect the new minimum wage and salary thresholds.
Any employers desiring further guidance regarding compliance with these regulations or any employment matters should contact MNK Law at info@mnklawyers.com or 562.362.6437.