California Minimum Wage 2026: What Employers Need to Know

State Baseline: $16.50 per Hour

As of January 1, 2026, California state minimum wage is $16.50 per hour for all employers, regardless of size. This applies to every city and county in the state unless a local ordinance sets a higher rate.

Cities That Pay More

Several major California cities mandate higher minimum wages. San Francisco leads at $18.67 per hour. Los Angeles requires $17.28 for most employers. San Jose follows at $17.55, and Mountain View at $18.75. These rates are adjusted annually, typically tied to the Consumer Price Index (CPI).

Key Compliance Points for Employers

If you are hiring in California, you must pay the highest applicable rate - whether that is the state, county, or city minimum. Employers who operate in multiple cities need to track each location separately. Failing to comply can result in penalties, back pay, and lawsuits under the California Labor Code.

Exempt vs. Non-Exempt Employees

To classify an employee as exempt from overtime in California, you must pay at least twice the state minimum wage. In 2026, that means exempt employees must earn at least $68,640 per year ($16.50 x 2 x 2,080 hours). Cities with higher minimums do not change this threshold - the state rate is what matters for exempt classification.

What Should Employers Do?

Review all employee wages against both state and local minimums. Update payroll before January 1 each year. Post the required minimum wage notices in all workplaces. Consider using a compliance tool like HireStates to automatically track rate changes across all your hiring locations.