California’s state minimum wage is increasing by 40 cents, rising to $16.90 per hour starting January 1, 2026.

What this means for employers:

• Employees earning at or near the current minimum wage will need pay adjustments to stay compliant.
• Exempt employees’ salaries must also meet the minimum threshold—at least double the state minimum wage.
• The new minimum salary for exempt workers will be $70,304 per year ($5,858.67 per month) starting January 1.

Action tip: Review payroll and budgets now to ensure your team is set for a smooth transition and avoid compliance issues.