California Minimum Wage Updates for 2026

As you probably recall, for the past several years, the state has increased the minimum wage each January 1st. 2026 is no exception. To make sure you have the correct amounts calculated into your budget for 2026, here is what you need to know.

State Minimum Hourly Wage

As of 1/1/26, the state hourly minimum wage will rise to $16.90 from its current $16.50. This not only affects the rate of pay for your employees, but their overtime rate of pay, as well as the minimum salary that must be paid to exempt employees.

Minimum Hourly Wage for Certain Municipalities/Counties

Now, as testament to how difficult it is to be a California employer, if your employees perform their work in certain municipalities or unincorporated areas of Los Angeles County, there is a different minimum wage. While I have not included all the cities or counties that have different minimum wage rates, the following have different rates. Note that the Los Angeles County minimum only applies to unincorporated areas of Los Angeles County. If your employees are located in an incorporated city, then the city rate will apply, or the state rate if the city does not have its own minimum wage rate. For example, although Torrance is located in Los Angeles County, it is an incorporated city, so the city rules apply. Torrance follows the state minimum wage, so employees need to comply with the state minimum wage rate.

Some of those cities/county areas are:

• City of Los Angeles – currently $17.87, may change as of July 1, 2026
• Unincorporated areas of Los Angeles County – currently $17.81, may change as of July 1, 2026
• City of Santa Monica – currently $17.81, may change as of July 1, 2026
• City of Malibu – currently $17.27, may change as of July 1, 2026
• City of Pasadena – currently $18.04, may change as of July 1, 2026
• City of West Hollywood – currently $20.25, may change as of July 1, 2026
• City of San Diego – currently$17.25, to change to $17.75 as of January 1, 2026.

Minimum Salary Rate for Exempt Employees

If any of your employees qualify to be exempt (meaning they do not get overtime pay), when the minimum wage increases, the minimum salary amount that must be paid to exempt employees also increases. The minimum salary for 2026 will be $70,304.00. If your salaried employee is not being paid at least that much as of 1/1/26, then they do not qualify as exempt and must be paid by the hour, get paid overtime, must take on-time meal breaks, and must record all their hours worked. And, remember, the minimum salary amount is irrespective of how many hours they are expected to work a week – whether it is 20 hours a week or 40, starting 1/1/26, they must be paid a minimum of $70,304 as salary. Note that even if your exempt employees perform their work in the one of the cities that has its own minimum wage, the minimum salary (except for certain employers, such as large fast-food employers) employees must make is twice the STATE minimum wage for full-time work, so it would still be the minimum of $70,304.

Which Rate Applies for Remote Employees?

The minimum wage rate that applies to employees is the one that is in effect at the location where they perform their work. Therefore, if your business is located in Torrance, but your remote employee performs their work at their home in the city of Los Angeles, then, the minimum wage for the city of Los Angeles applies. Contact our firm to get more details on this.