The California minimum wage is $16.90 per hour as of January 1, 2026, and it applies to every employer in the state regardless of size.1California Department of Industrial Relations. California’s Minimum Wage Set to Increase to $16.90 per Hour on January 1, 2026 Two industries have their own, higher floors written into separate laws: fast food workers earn at least $20.00 per hour, and healthcare workers earn between roughly $18.63 and $25.00 depending on the type of facility. Dozens of California cities also set local minimums above the state rate, and when rates overlap, the worker gets the highest one.
Who the $16.90 Rate Covers
The $16.90 figure is the statewide floor for 2026. It replaced the $16.50 rate that took effect January 1, 2025, which itself replaced the $16.00 rate from 2024.2Department of Industrial Relations. Minimum Wage Unlike earlier years, there’s no longer a split between large and small employers. Every business pays the same state rate.
That rate is a baseline. If an employee works in a city with a higher local minimum, or in an industry with a special wage law, the higher number controls.
Fast Food Workers: $20.00 Per Hour
Assembly Bill 1228, signed in September 2023, set a $20.00 per hour minimum for covered fast food employees starting April 1, 2024.3Department of Industrial Relations. Fast Food Council The rate still stands at $20.00 for 2026.2Department of Industrial Relations. Minimum Wage
The law covers employees at limited-service restaurants, meaning places where you order and pay before eating, that belong to chains with at least 60 locations nationwide. Off-site offices and warehouses don’t count toward the 60-location threshold.4Department of Industrial Relations. Fast Food Minimum Wage Frequently Asked Questions Sit-down restaurants with full table service, independent bakeries, and standalone cafés are outside the law’s reach and pay the general $16.90 rate (or the applicable local rate).
A Fast Food Council within the Department of Industrial Relations can raise the rate going forward, but annual increases are capped at 3.5 percent or the change in the consumer price index, whichever is smaller.4Department of Industrial Relations. Fast Food Minimum Wage Frequently Asked Questions
Healthcare Workers: Tiered Rates From $18.63 to $25.00
Senate Bill 525, together with follow-up legislation SB 828 and SB 159, built a separate wage schedule for healthcare workers that took effect October 16, 2024. All covered employees will eventually reach $25.00 per hour, but how fast depends on the size and type of facility.5Department of Industrial Relations. Health Care Worker Minimum Wage Frequently Asked Questions
For 2026, the rates work out as follows:
- Large health systems and dialysis clinics with 10,000 or more full-time equivalent employees: $24.00 per hour through June 30, 2026, then $25.00 starting July 1, 2026.
- Facilities in counties with more than five million residents: same schedule, reaching $25.00 on July 1, 2026.
- Community clinics, rural health clinics, and similar outpatient facilities: $21.00 per hour through June 30, 2026, then $22.00 starting July 1, 2026.
- Most other covered healthcare employers: $21.00 per hour through June 30, 2026, then $23.00 starting July 1, 2026.
- Safety-net hospitals and rural facilities with a high government-payor mix or located in small counties: $18.63 per hour through June 30, 2026, then $19.28 starting July 1, 2026. This slowest group doesn’t reach $25.00 until 2033.
Covered employees include workers at hospitals, clinics, skilled nursing facilities, home health agencies, and dialysis centers, among others.5Department of Industrial Relations. Health Care Worker Minimum Wage Frequently Asked Questions The staggered design lets large, well-funded systems absorb the full $25.00 first while rural hospitals that rely heavily on Medi-Cal and Medicare get more time.
Local City and County Minimums
Roughly 40 California cities and counties enforce their own minimum wage ordinances above $16.90 per hour as of January 2026. Several Bay Area cities are among the highest in the country. Emeryville’s rate exceeds $19.00 per hour, and West Hollywood’s surpasses $20.00. San Francisco, San Jose, Los Angeles, and San Diego all set minimums above $17.00.
When state, local, and federal rates differ, the worker is entitled to the highest. Local rates typically adjust on January 1 or July 1 using a regional consumer price index, so an employer with locations in multiple cities may face a different minimum at each site.
How the Annual Adjustment Works
California no longer sets its minimum wage through one-off legislation. Once scheduled increases under the state Labor Code reached $15.00 per hour, the rate began adjusting automatically each year based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). By August 1 each year, the Director of Finance compares the most recent 12-month CPI-W average to the prior year’s. The resulting increase is capped at 3.5 percent and rounded to the nearest ten cents.6California Legislative Information. California Labor Code LAB 1182.12
Two guardrails are built in. If inflation turns negative, the minimum wage stays flat rather than dropping. And the 3.5 percent cap prevents a single high-inflation year from producing a sudden jump.7Department of Industrial Relations. Minimum Wage Frequently Asked Questions The Governor no longer has authority to pause a scheduled increase.
What Happened to the $18 Proposal
Proposition 32, officially titled the Living Wage Act, appeared on the November 2024 ballot and would have raised the statewide minimum to $18.00 per hour.8California Secretary of State. California Voter Information Guide – Proposition 32 Voters rejected it by a narrow margin, with roughly 51 percent voting no.9Legislative Analyst’s Office. Proposition 32 – Raises Minimum Wage With Prop 32 defeated, the general minimum continues climbing only through the automatic CPI-W adjustment. The 2026 rate sits $1.10 below where the initiative would have placed it, and without new legislation, the general rate won’t reach $18.00 for several more years.
Effect on Exempt Employee Salaries
Every minimum wage increase pulls the salary threshold for white-collar overtime exemptions up with it. To qualify as exempt from overtime under state law, an employee must earn at least twice the minimum wage for a full-time schedule. For 2026, that calculation (16.90 x 2 x 2,080 hours) produces a minimum annual salary of $70,304 for exempt status.1California Department of Industrial Relations. California’s Minimum Wage Set to Increase to $16.90 per Hour on January 1, 2026
Any salaried exempt employee earning less than $70,304 in 2026 must either receive a raise or be reclassified as non-exempt and paid overtime for hours beyond eight in a day or 40 in a week. The threshold rises every January alongside the minimum wage, so classification needs a fresh look each year.
Penalties for Paying Below the Required Rate
An employer who intentionally underpays faces a civil penalty of $100 per underpaid employee per pay period for a first violation, plus the unpaid wages themselves. A second offense involving the same type of violation carries a $250 penalty per employee per pay period regardless of intent.10California Legislative Information. California Labor Code LAB 1197.1
Employees can also recover liquidated damages equal to the full amount of unpaid wages, effectively doubling what the employer owes. An employer can escape liquidated damages only by proving to a court or the Labor Commissioner that it acted in good faith and genuinely believed its pay practices were correct. Given how publicly the annual rate changes are announced, that defense rarely succeeds.