What goes up continues to go up!  As we pointed out here last year, the trend of increasing the minimum wage throughout the State of California continues, as follows:

State:

On January 1, 2026, the California state minimum wage, excluding fast food industry employers and certain healthcare facilities, will increase from $16.50 per hour to $16.90 for employers of all sizes, reflecting a 2.49% increase, which is based on the expected rate of inflation.  The state minimum wage also governs the exempt employee threshold salary, which will increase accordingly.  The new minimum salary for employees who otherwise qualify to be exempt from overtime will be $70,304 annually (or $1,352.00 per week) for employers of all sizes.  Rates for certain qualified computer software professionals who are exempt from overtime are $58.85 per hour, or an annual salary of $122,573.13.

As noted above, the minimum wage laws for fast food industry employers and healthcare facilities in California are different from the basic state law, and will require hourly minimum rates higher than the $16.90 hourly rate that applies to other state employers.  Specifically, as of April 1, 2024, all covered national fast food restaurant employees must be paid at least $20.00 per hour; fast food employees who are exempt from overtime must be paid a salary of not less than $83,200 a year. The Fast Food Council may adjust these rates for 2026. 

After a number of delays, as of October 16, 2024, specified healthcare workers must be paid an increased minimum wage which ranges from $18.63 per hour, to $24.00 per hour, depending on the employer type.  These rates were last increased on July 1, 2025, and are set to increase again on July 1, 2026.  Over time, the minimum wage for all covered healthcare facilities will rise to at least $25.00 per hour.  

Local:

Several California municipalities raised their minimum wage rates on July 1, 2025.  Employers should take care to note these changes because the pace of minimum wage increases in these locations surpasses the rate required by the State of California. 

Several cities increased their minimum wage rates based on the Consumer Price Index (CPI).  Among these are the City of Los Angeles, where the current minimum wage increased from $17.28 to $17.87 per hour for all employers.  In Malibu, at its May 21, 2025, City Council Meeting, the City Council approved a one-year suspension of the scheduled minimum wage increase to support businesses impacted by the effects of the Palisades Fire.  As a result, the minimum wage in the City of Malibu will remain at $17.27 per hour for Fiscal Year 2025–2026.  In Santa Monica and unincorporated Los Angeles County, the minimum wage increased from $17.27 to $17.81 per hour for all employers.  In Pasadena, the current minimum wage increased from $17.50 to $18.04 per hour for all employers.  In the City of West Hollywood, the hourly minimum wage (excluding hotel workers) will increase on January 1, 2026, from  $19.65 to $20.25. 

In determining whether a given increase applies, employers should know that it is not where an employee lives, or where an employer is based, that determines the minimum wage that must be paid.  Rather, it is where the employee works that determines the applicable minimum wage rate.  In many municipalities, if an employee works as few as two hours in the city in a week, that municipality’s minimum wage will apply to the time worked there for that week.

A number of local cities have set higher minimum wage rate increases for hospitality workers. The City of Los Angeles minimum wage rate of $22.50 per hour for workers at hotels with 60 or more rooms took effect on September 8, 2025, after having been put on hold.  This rate will increase in phases, reaching $30.00 per hour by July 2028.  In the City of Santa Monica, the minimum wage for hotels and businesses operating on hotel property is $22.50, effective September 8, 2025.  The City of West Hollywood’s minimum wage for hotel employees is currently $20.22, which will remain in effect until June 30, 2026.  The City of San Diego’s new hospitality minimum wage ordinance, which applies to hotels with at least 150 guest rooms or suites, certain amusement parks and event centers, sets a minimum wage to take effect on July 1, 2026, of $19.00 per hour for covered hotels and amusement parks and $21.06 per hour for covered event centers.  Increases will be phased in over the next several years, reaching $30.00 per hour for all covered San Diego hospitality businesses on July 1, 2030.

The author would like to gratefully acknowledge the assistance of Joanne Warriner.

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