California’s Minimum Wage to Increase to $17.40 Per Hour on January 1, 2027

On July 31, 2026, California’s Director of Finance certified that the State’s minimum wage will increase to $17.40 per hour effective January 1, 2027, in accordance with applicable Labor Code requirements.

This increase to California’s minimum wage will result in a higher base salary requirement for employees deemed exempt under California’s professional, administrative, and executive exemptions. In order to be considered exempt, among other requirements, employees must be paid a fixed salary equivalent to no less than two times the state minimum wage for full-time employment, which cannot be pro-rated for part-time work.  For 2027, this salary requirement will increase to a monthly salary of $6,032 (or an annualized salary of $72,384).

California’s current statewide minimum wage for 2026 is $16.90.  However, numerous cities and counties have enacted local minimum wage requirements that exceed the State minimum. In addition, certain fast food and healthcare facility employers must pay a different, specified minimum wage rate. Employers must be sure to pay their non-exempt employees at the highest applicable minimum wage rate. Additional information about the various state and local minimum wage requirements within California can be found on the DLSE’s Minimum Wage webpage.

Employers with questions regarding the State or local minimum wage laws may contact the author of this post or their usual employment law counsel at AALRR.

This AALRR publication is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process.

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