California Statewide Minimum Wage Increases to $16.90 on January 1, 2026
Effective January 1, 2026, California’s statewide minimum wage increases to $16.90 per hour. This increase applies to most employees working in California and reflects the state’s ongoing adjustments to minimum wage levels under the Labor Code and Industrial Welfare Commission wage orders. Employers should ensure that all non-exempt employees are paid at least this amount beginning with the first payroll period that includes January 1, 2026.
The updated statewide minimum wage is reflected in the current Industrial Welfare Commission wage orders published by the California Labor Commissioner. Those wage orders govern minimum wages, overtime, meal and rest periods, and working conditions across industries and occupations throughout the state. Employers should review the applicable wage order for their industry to confirm compliance with both minimum wage and related requirements.
It is important to note that the statewide minimum wage of $16.90 represents a floor, not a ceiling. Certain categories of employees are subject to higher minimum wages under separate statutory schemes. In particular, the fast food minimum wage remains at $20.00 per hour and is not reduced or affected by the statewide increase. Fast food employers covered by the Fast Food Accountability and Standards Recovery Act must continue to comply with the $20 minimum wage requirement unless and until it is amended by future legislation or regulatory action.
Similarly, certain healthcare workers may be subject to higher minimum wages under industry-specific laws, and many cities and counties in California have adopted local minimum wage ordinances that exceed the state minimum wage. Employers operating in jurisdictions with local minimum wage ordinances must pay the highest applicable wage rate, whether state, local, or industry-specific.
The increase in the statewide minimum wage may also affect other wage-and-hour obligations. Because California ties several calculations to the minimum wage, increases can impact salary thresholds for exempt employees, minimum compensation for certain commissioned employees, split-shift premiums, reporting time pay calculations, and meal and rest period premium rates. Employers should review their pay practices holistically rather than treating the minimum wage increase as a standalone adjustment.
Employers should audit hourly rates, review payroll systems, update offer letters and compensation policies where necessary, and ensure that supervisors understand the new requirements. Employers with multi-location operations or mixed workforces, such as businesses employing both fast food workers and non-fast-food employees, should take particular care to apply the correct wage rate to the correct group of employees.
If you have questions about how the 2026 minimum wage increase applies to your workforce, how it interacts with local ordinances or industry-specific wage laws, or how to update your payroll and compliance practices, experienced employment counsel can help you assess risk and ensure compliance under California law.