California Minimum Wage Announced for 2026

It’s not fall quite yet, but California employers should take note that the State minimum wage will increase to $16.90/hour as of January 1, 2026.

The State’s Director of Finance confirmed this increase in an August 1 letter to Governor Newsom. As the letter explains, this $00.40 per hour increase reflects a 2.49% increase in the national Consumer Price Index for urban wage earners, or CPI-W. (California’s minimum wage is adjusted annually based on the CPI-W increase, up to a maximum of 3.5%.)

The minimum wage increase also impacts exempt employee salary requirements. Remember, in addition to meeting a duties test, the administrative, professional, and executive exemptions require that the exempt employee earn two times the State’s minimum wage (multiplied by 2080 hours/year) on a salaried basis. This means that when the minimum hourly wage increases to $16.90 per hour on January 1, 2026, the minimum exempt annual salary will increase to $70,304.

Industry-Specific Wages

Certain businesses are subject to industry-specific state minimum wage and salary requirements. Fast food workers at limited-service restaurants that are part of chains with over 60 locations nationally saw a state minimum wage increase to $20.00/hour as of April 1, 2024. The Fast Food Council, which is responsible for adjusting the fast food minimum wage, has not, as of now, announced a further increase.

For healthcare workers covered by the Healthcare Minimum Wage law, minimum wage currently ranges from $18.63/hour to $24/hour, depending on the facility type, with set future increases.

Local Minimum Wages

It is also important to remember that many jurisdictions in California have enacted their own minimum wage ordinances requiring employers to pay higher minimum hourly wages for work performed within their geographical boundaries. Be sure to check local minimum wages where you have remote non-exempt workers, including those working from home or on a hybrid schedule, and when you send workers to various job sites in different cities or counties. CEA members can refer to our Local Minimum Wage Fact Sheet on the HR Forms page.

Planning for 2026

Employers should consider how minimum hourly wage (and exempt salary) increases will affect their bottom line in 2026.

At CEA, we are experienced in helping our members develop creative HR solutions for their business. CEA members may call us on our HR support line for additional guidance at 800.399.5331.