Yes. In California, it is illegal to pay less than minimum wage for nearly every worker, and the statewide floor as of January 1, 2026 is $16.90 per hour for all employers regardless of size.1Labor Commissioner’s Office. Minimum Wage Many workers are entitled to more than that, because higher city rates and industry-specific rates for fast food and healthcare stack on top of the state floor. An employer who pays below the applicable rate owes the missing wages, an equal amount again in liquidated damages, and additional civil penalties.
The Rate You Must Be Paid
The $16.90 statewide rate is the floor, not the ceiling. When state, local, and industry rates all apply to the same job, the employer must pay whichever is highest for the location where the work is performed.
Fast food restaurant employees covered under AB 1228 must be paid at least $20.00 per hour.1Labor Commissioner’s Office. Minimum Wage Healthcare workers have a schedule that varies by facility type and size. Employees at large hospitals, dialysis clinics, and facilities run by large counties earn at least $24 per hour through June 30, 2026, rising to $25 on July 1, 2026. Smaller clinics and rural health facilities start at $21 through June 2026, with scheduled increases after that.2California Department of Industrial Relations. Health Care Worker Minimum Wage Frequently Asked Questions
Dozens of California cities set their own minimums above the state figure. Los Angeles rises to $18.42 per hour effective July 1, 2026.3Office of Wage Standards. Office of Wage Standards San Francisco moves to $19.61 on July 1, 2026. West Hollywood, Emeryville, and Berkeley also sit well above the state rate.
Tips Don’t Count Toward the Minimum
Federal law lets employers count part of a worker’s tips toward the minimum wage. California does not. The full minimum wage has to be paid on top of any tips received.4Labor Commissioner’s Office. Tips and Gratuities A restaurant paying servers $10 an hour plus tips is breaking the law no matter how much the server takes home.
Who Is Not Entitled to Minimum Wage
The list of workers who fall outside minimum wage protection is shorter than many employers assume.
Independent contractors. Genuine contractors are not covered by California’s wage laws, but the state makes that status hard to claim. Under the ABC test, every worker is presumed to be an employee unless the hiring entity proves all three: the worker is free from the company’s control and direction, the work falls outside the company’s usual business, and the worker runs an independently established business in that field.5Labor & Workforce Development Agency. About the ABC Test Misclassifying employees as contractors to dodge minimum wage is one of the most common violations the Labor Commissioner investigates.6Labor Commissioner’s Office. Independent Contractor Versus Employee
Salaried exempt employees. Executives, administrators, and professionals can be exempt, but only if they pass both a duties test and a salary test. The salary threshold is twice the state minimum wage for full-time work, which for 2026 means at least $70,304 per year. Below that, the worker is non-exempt and entitled to the hourly minimum for all hours worked. Computer software professionals have a separate threshold: $58.85 per hour or $122,573.13 per year in 2026.7California Department of Industrial Relations. Overtime Exemption for Computer Software Employees
Learners. Workers of any age with no previous experience in their occupation may be paid 85% of the minimum wage, currently about $14.37 per hour, for their first 160 hours on the job.8Division of Labor Standards Enforcement. Minimum Wage Frequently Asked Questions After 160 hours the full minimum applies. This covers a genuinely new occupation, not just a new employer in the same field.
Outside salespeople. Employees whose primary duties are making sales or taking orders away from the employer’s place of business are exempt. Inside sales staff and workers who split time between the office and outside calls are not.
One category that used to exist no longer does. California previously allowed certain employers to pay workers with disabilities less than the minimum wage under a special license. SB 639 phased that out, and since January 1, 2025, no employer in California may pay a worker with a disability less than the applicable minimum wage.9California Legislative Information. SB-639 Minimum Wages Persons With Disabilities
How to File a Wage Claim
Workers paid less than the applicable minimum wage can file a wage claim with the Division of Labor Standards Enforcement (DLSE), also called the Labor Commissioner’s Office. There is no fee, and claims must be filed within three years of the violation.10Division of Labor Standards Enforcement (DLSE). How to File a Wage Claim
The claim form is on the California Department of Industrial Relations website and can be submitted by email, mail, or in person. Pay stubs, time records, and any other documentation of hours worked and wages paid strengthen the claim. The DLSE will still investigate without perfect records.10Division of Labor Standards Enforcement (DLSE). How to File a Wage Claim
Settlement Conference
After the DLSE reviews the claim, both sides are usually called to a settlement conference. A deputy labor commissioner works with the parties to negotiate a resolution. If the employer doesn’t show, the claim moves straight to a formal hearing. If the employee doesn’t appear without good cause, the claim is dismissed.11Division of Labor Standards Enforcement (DLSE). Your Settlement Conference Either party can accept or reject any offer, and the DLSE only enforces settlements signed on its official forms.
There is a real tradeoff. A settlement means guaranteed money now. A hearing may produce a larger award, but an employer who shuts down or files for bankruptcy before paying leaves the worker with nothing.
Hearing and Appeal
If no settlement is reached, the case goes to a hearing before a DLSE hearing officer. Both sides present testimony and evidence, and the officer issues a decision within 15 days. An employer who fails to appear risks a default judgment. Either party can appeal within 15 days by filing in the local county Superior Court, where the case starts over with a fresh trial rather than a review of the DLSE record.12Division of Labor Standards Enforcement. After the Hearing
What the Employer Owes
Penalties for paying below minimum wage stack.
Unpaid wages plus liquidated damages. The employer owes the full difference between what was paid and what should have been paid, plus liquidated damages equal to that amount, plus interest. Total liability roughly doubles unless the employer proves a good-faith belief that the pay was lawful.13California Legislative Information. California Labor Code LAB 1194.2
Civil penalties. Separate from what the employee recovers, an intentional first violation carries a $100 penalty per underpaid employee per pay period. Subsequent violations rise to $250 per employee per pay period regardless of intent.14California Legislative Information. California Labor Code LAB 1197.1
Waiting time penalties. If an underpaid worker leaves or is fired and the employer still hasn’t made things right, Labor Code Section 203 adds the employee’s daily wage for each day payment remains overdue, capped at 30 calendar days. For someone earning $16.90 an hour on an eight-hour schedule, that is roughly $135 per day, or up to $4,056 at the cap.15Department of Industrial Relations. Waiting Time Penalty The only defense is a genuine good-faith dispute over whether wages were owed.
Criminal charges. Willful violations can be prosecuted as misdemeanors, with fines and potential jail time. The California Attorney General or local district attorneys may also pursue civil actions against employers engaged in systemic wage theft, which can result in broad injunctive relief or restrictions on public contracting.
You Cannot Be Punished for Speaking Up
It is illegal for an employer to fire, demote, suspend, or take any other adverse action against a worker for filing a wage claim, complaining about unpaid wages, or cooperating with a DLSE investigation. If the employer acts within 90 days of the worker’s protected activity, the law creates a rebuttable presumption that the action was retaliatory, forcing the employer to prove a legitimate reason.16California Legislative Information. California Labor Code LAB 98.6
Workers who suffer retaliation are entitled to reinstatement, reimbursement for lost wages and benefits, and a civil penalty of up to $10,000 per employee per violation.16California Legislative Information. California Labor Code LAB 98.6 Claims can be filed confidentially.