The statewide California minimum wage will increase from $16.90 to $17.40 per hour on January 1, 2027, reflecting a 2.99 percent inflation adjustment.
| JAN. 1, 2027 EFFECTIVE DATE | $17.40 / HOUR STATEWIDE FLOOR | $72,384 / YEAR EXEMPT SALARY FLOOR |
The Director of the Department of Finance stated: “This year, the Department of Finance calculates the average U.S. CPI-W for the 12-month period from July 1, 2025, to June 30, 2026, increased by 2.99 percent compared with the 12-month period from July 1, 2024, to June 30, 2025. As a result, pursuant to section 1182.12(c), the minimum wage shall increase by 2.99 percent to $17.40 per hour and shall be implemented for all employers on January 1, 2027.” You can read the full memo here. You can also read the Governor’s statement here.
This increased minimum wage rate will apply to all California employers, regardless of employer size, unless an exemption or a higher local or industry rule applies.
It also raises the minimum salary basis for most executive, administrative, and professional exemptions. The new salary threshold will be $72,384 per year ($17.40 × 2 × 2,080), up from $70,304 this year. Remember that meeting the salary basis test alone does not establish exempt status; the duties test, requiring that 51% or more of all hours worked be spent performing exempt-level work, and other exemption requirements still apply.
Questions about minimum wages or other California employment law requirements? Contact EmployLaw Group for practical, proactive legal guidance that helps employers stay compliant and minimize risk. Call (805) 586-1381 to speak with our team.