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by Michelle Galbraith, J.D.; Employment Law Adviser, CalChamber
To paraphrase Benjamin Franklin, nothing is certain except death, taxes and annual California minimum wage increases. While Franklin may have omitted that last part, California employers know that California has regularly increased employee minimum wage rates every year, and 2026 is no exception. Prior to ringing in the new year, employers should review their compensation plans to ensure that they’re prepared to comply with the new rates — not just the statewide rate but also local minimum wage rates and exempt minimum salary requirements.
Currently, the statewide minimum wage for employers of any size is $16.50 per hour. Effective January 1, 2026, this rate will increase to $16.90 per hour.
This also triggers an increase in minimum salaries paid to exempt employees. To qualify under the administrative, professional or executive exemption, California employees must meet:
With the 2026 increase, the new exempt minimum salary for those classifications will be $70,304 per year ($5,858.67 per month).
The minimum salaries for computer professionals and licensed physicians to be considered exempt are increasing as well. In 2026, computer professionals must be paid an hourly wage of $58.85, and licensed physicians must be paid at least $107.17 per hour. Like the administrative, professional and executive exemptions, both computer professionals and licensed physicians must also meet a job duties test to qualify as exempt.
Since October 16, 2024, certain health care employees are entitled to higher minimum wages. Notably, these minimum wage rate increases will also impact the calculation of exempt salary thresholds for covered employees.
Depending on the type of facility and its size, those nonexempt health care workers may be entitled to between $18.63 per hour up to $24 per hour. For exempt health care workers, the law specifically provides that in order for a covered health care employee to qualify as exempt from minimum wage and overtime laws, the employee must earn a monthly salary equivalent to no less than 150 percent of the health care worker minimum wage or 200 percent of state’s general minimum wage rate, whichever is greater. So, the minimum salary requirements for exempt health care workers could be up to $74,880 per year.
Keep in mind that minimum wage increases for health care workers occur on July 1 of each year, so there is no change starting in January.
In California, many fast food workers must be paid at least $20 per hour, and managers of covered fast food establishments must make at least $83,200 per year to be considered exempt.
Established within the California Department of Industrial Relations, the Fast Food Council, governs fast food wages and develops standards, rules, and regulations for the fast food industry. In 2025, the full council didn’t meet at all and has been without a Chair since May 2025. Currently, the Fast Food Council has not announced any changes to these fast food minimum wage rates nor does it have any 2026 meetings scheduled.
Many California municipalities have passed local minimum wages that are higher than the statewide rate of $16.90 per hour. Employers covered by those local laws must pay the higher amount to their nonexempt employees.
Here’s a look at the new 2026 local minimum wage rates:
Local minimum wages, however, do not affect exempt minimum salary requirements, which are only tied to the state minimum wage or are industry specific.
Finally, because employers must post the minimum wage rate in each business location, they will need to update their posters for 2026. The new statewide minimum wage is reflected on CalChamber’s all-in-one 2026 California and Federal Labor Law Poster, which will have the new notice as well as another mandatory updated notice — Healthy Workplace/Healthy Families Act Notice.
Plus, employers in the health care and fast food industries have supplemental industry-specific posters they need to post in addition to CalChamber’s all-in-one poster.
And since local ordinances often have their own notice requirements, it’s likely employers with employees working in those cities with January 1 minimum wage updates will need to update those posters too.