San Jose, CA Minimum Wage: Coverage, Annual Increases, and Overtime

The San Jose minimum wage is $18.45 per hour as of January 1, 2026. That rate sits well above California’s statewide floor of $16.90 and the federal minimum of $7.25, and it applies to every employer in the city regardless of size or industry.¹ If you work in San Jose even a few hours a week, your employer owes you at least this rate for every hour on the clock.

Recent Rate History

San Jose has raised its minimum wage every year for more than a decade. Each rate takes effect on January 1 and holds through December 31:¹

2026: $18.45 per hour
2025: $17.95 per hour
2024: $17.55 per hour
2023: $17.00 per hour
2022: $16.20 per hour

There is no separate rate for small businesses, no training wage for adults, and no phase-in schedule based on employer size.

How San Jose’s Rate Compares to State and Federal Law

Three minimum wage laws can apply to one San Jose worker at the same time: federal, California state, and local. When they overlap, the worker gets whichever rate is highest.² For work performed inside city limits, San Jose’s $18.45 rate controls because it exceeds California’s $16.90 minimum and the federal $7.25.³

One exception matters. California fast food workers covered under AB 1228 earn at least $20.00 per hour statewide, which is higher than San Jose’s general rate.³ If you work at a qualifying fast food chain in San Jose, you are owed at least $20.00 per hour. Certain healthcare workers are also entitled to a higher state-mandated minimum. Everyone else in the city is entitled to $18.45.

Who Is Covered

The ordinance covers any person who performs at least two hours of work inside San Jose’s geographic boundaries in a single week. Part-time, full-time, seasonal, and temporary workers all qualify regardless of where they live. Even workers who only cross into San Jose briefly for deliveries, service calls, or short shifts earn the local rate for every hour worked inside city limits. Employers operating across multiple cities need to track where each employee actually performs work, because the same person may earn different rates in different jurisdictions in the same week.

There is a narrow exemption for certain youth training programs.⁴ Outside of that, coverage is broad.

Independent Contractor Misclassification

The ordinance protects employees, not independent contractors. Some employers label workers as contractors to avoid paying the local rate when the working relationship looks nothing like an independent business. California uses a strict “ABC test” that presumes a worker is an employee unless the hiring entity proves otherwise. At the federal level, the Department of Labor applies an “economic reality” test focused on how much control the worker has and whether the worker has a genuine opportunity for profit or loss. If your employer sets your schedule, provides your tools, and dictates how the work gets done, a contractor label on paper will not hold up.

Tips Do Not Count Toward the Wage

California does not allow a tip credit. Under California Labor Code Section 351, every gratuity belongs entirely to the employee, and employers cannot deduct tips from wages or credit them against the hourly obligation.⁵ A restaurant server in San Jose must be paid the full $18.45 per hour before tips. That is a sharp break from states where tipped workers can earn a direct cash wage as low as $2.13 per hour under federal rules.⁶

How the Rate Changes Each Year

San Jose’s minimum wage adjusts automatically each January based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the San Francisco-Oakland-Hayward metropolitan area. The city manager typically announces the new rate by October, giving employers about two months to update payroll before it takes effect. If regional living costs do not rise, the rate stays flat. It never goes down. That formula is what moved the wage from $17.95 in 2025 to $18.45 in 2026.¹

Overtime on Top of the Minimum

California overtime rules apply to San Jose workers alongside the local minimum wage, and they are more generous than federal law. You earn overtime after eight hours in a single workday, not just after 40 hours in a week:⁷

Time-and-a-half (1.5x) for hours beyond eight in a workday up to 12, and for the first eight hours on a seventh consecutive day worked in a workweek.
Double time (2x) for hours beyond 12 in a workday, and for hours beyond eight on that seventh consecutive workday.

At the 2026 minimum wage, time-and-a-half works out to roughly $27.68 per hour and double time to about $36.90. Some salaried workers in executive, administrative, or professional roles are exempt from overtime if they meet specific tests, and California’s salary threshold for exempt employees is typically set at twice the state minimum wage.⁸

Employer Posting and Recordkeeping

Every San Jose employer must display the city’s official minimum wage bulletin where employees can easily see it. For 2026 the bulletin must be posted in six languages: English, Spanish, Vietnamese, Hindi, Tagalog, and Chinese.¹ Failing to post the notice is itself a violation, even when the employer is paying the correct wage. Payroll records must be kept for at least four years and must include each employee’s name, address, job classification, hours worked, and wages paid. Gaps in documentation tend to work against the employer when a dispute arises.

Filing a Complaint

If your employer is paying less than $18.45 per hour for work performed in San Jose, you can file a complaint with the city’s Office of Equality Assurance:

Online: submit a complaint form through the city’s website.
Phone: 408-535-8430.
Email: MyWage@sanjoseca.gov.

You will be asked for your name, mailing address, phone number, your employer’s name and address, your supervisor’s name, a description of your work, and how and when you are paid. All complaints are confidential.¹

The office investigates by reviewing payroll records and interviewing both sides. An employer found in violation can be ordered to pay back wages plus interest, along with administrative fines that can reach $50 per day for each affected worker. Under federal law, employees generally have two years to pursue unpaid wage claims, or three years if the violation was willful.⁹

Retaliation Protections

San Jose’s ordinance makes it unlawful for an employer to retaliate against any worker who exercises their minimum wage rights, including filing a complaint or simply asking about the rate they are owed. You cannot legally be fired, demoted, or have your hours cut for raising a wage issue. Federal law reinforces this. Under Section 15(a)(3) of the Fair Labor Standards Act, employers who retaliate against workers for filing wage complaints can be ordered to reinstate the worker and pay lost wages plus an equal amount in liquidated damages.¹⁰ Those protections apply whether the complaint is oral or in writing, and whether it goes to a government agency or just to the employer internally.

1
City of San José. Minimum Wage Ordinance
2
U.S. Department of Labor. Wages and the Fair Labor Standards Act
3
California Department of Industrial Relations. Minimum Wage
4
Municode. San Jose Code of Ordinances – Chapter 4.100 Minimum Wage Ordinance
5
California Legislative Information. California Labor Code LAB 351
6
U.S. Department of Labor. Fact Sheet 15 – Tipped Employees Under the Fair Labor Standards Act
7
California Department of Industrial Relations. Overtime
8
U.S. Department of Labor. Exemption for Executive, Administrative, Professional, Computer and Outside Sales Employees Under the Fair Labor Standards Act
9
U.S. Department of Labor. Back Pay
10
U.S. Department of Labor. Fact Sheet 77A – Prohibiting Retaliation Under the Fair Labor Standards Act