California’s Minimum Wage Gets An Almost 3% Increase In 2026

In the state of California, the new minimum wage will increase to $16.90 a $.40 increase from this year.

This follows a trend since 2023, in which the hourly rate has increased each year. This trend is due to the state law that’s in place, which requires the director of finance, Joe Stephenshaw, to calculate the adjusted minimum wage every year before August 1.

Due to this law, the minimum wage will increase by 2.49% and will take effect on New Year’s Day (January 1) for all employers. This adjustment is based on inflation to ensure all employers, regardless of size, are treated equally.

According to the ADP, California is among 19 other states increasing their minimum wage in 2026. As of right now, Washington DC has the highest minimum wage with $17.95 an hour. The state of Washington is increasing their minimum wage to $17.13 an hour. As for the state of California, they’re currently at number four in the highest minimum wage, followed by Connecticut at number five.

Some jobs pay higher wages than others; for example, fast food and healthcare workers will not be included in the increase. Despite the entire state receiving a $.40 increase, cities and counties within California have set higher minimum wages. Emeryville currently has the highest minimum wage in the state, at $19.90, followed by Berkeley and West Hollywood.

Since 1916, the California Industrial Relations Department has steadily increased wages. In that year, the wage was set at $.16 and didn’t reach one dollar until 1957. In 1996, the minimum wage was set at $4.75 and didn’t reach double digits until 2016, with the trend steadily rising.

Due to rising wages, it will not only affect hourly wage earners, but also affect minimum salary standards for full-time exempt employees. People recommend that employers adjust their practices not only to ensure compliance but also to avoid potential risks. Increasing the minimum salary to over $70,000 per year means that exempt employees meet both duties and salary requirements. This is in place to ensure that salary-exempt employees receive fair compensation alongside their minimum wage increases.

“Employers may want to confirm that all employees treated as exempt or on executive administrative or professional basis meet both the duties requirements and the height and salary threshold,” stated the Blog Ogletree Deakins.

The overall increase was in response to the rejection of Proposition 32 in the 2024 election, which could have increased the minimum wage to $18. This rejection follows concerns about the potential for price spikes and job losses.

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