California’s Director of Finance Calculation of Adjustment has announced that the state’s minimum wage will increase by 2.49% from $16.50 per hour to $16.90 per hour for all employers on January 1, 2026.
Note that the change in the minimum wage also affects the minimum salary an employee must earn to meet one part of the state’s overtime exemption test. An employee must earn no less than two times the state’s minimum wage for full-time work to meet this initial requirement of the exemption test. As of January 1, 2026, employees in California must earn an annual salary of no less than $70,304 to meet this threshold requirement (up from $68,640 in 2025).