Earlier this year, several California cities increased their minimum wage. Did you make the changes? And California, along with several cities, will increase its minimum wage in January 2026. Here is what you need to know about the changes and your obligations.

California’s Minimum Wage is Going Up

On January 1, 2026, the minimum wage for all California employers (regardless of size) will increase from $16.50 per hour to $16.90 per hour. Here is more detail, what you need to consider in response, and why this matters to you:

• Because the salary of exempt employees must be at least twice the State’s minimum wage, the minimum salary requirements for exempt employees will increase from $68,640 to $70,304 per year. Please remember: in order for a position to be exempt, it must satisfy both this salary test and a “duties” test;

• Do you pay your Computer Professionals at an hourly rate (the only professional exemption where this is allowed)? Effective January 1, 2026, the minimum hourly rate for a computer professional in California will be $58.85 per hour. If you pay your exempt “computer professionals” on a salaried basis, they must be paid a minimum annual salary of $122,573.13.

• For employees required to provide their own hand tools, their hourly rate increases from $33.00 to $33.80;

• For the Inside Sales Exemption, the minimum salary requirement will increase to a minimum of $25.35 per hour (remember there are other requirements as well!);

• Split Shift Premium, Meal and Rest Period Premiums, Non-Productive Time, Paid Sick Leave + are Impacted: For split shifts, hourly employees who earn below a certain rate must be paid one hour at State or local minimum wage, whichever is higher. For meal and rest period premiums, non-productive time, and paid sick leave, the employee’s regular rate of pay needs to be at least the new minimum wage. Remember, employees need to be paid at the regular rate of pay (which may be more than their hourly rate) for these categories of work/time off.

Did you Comply with the Mid-Year City Minimum Wage Hikes?

Remember that effective July 1, 2025, several California cities increased their minimum wage pay requirements for non-exempt employees.
In Northern California:

• Alameda: $17.46/hour
• Berkeley: $19.18/hour
• Emeryville: $19.90/hour
• Fremont: $17.75/hour
• Milpitas: $18.20/hour
• San Francisco: $19.18/hour

In Southern California

• Los Angeles (City): $17.87/hour (and will be adjusted again in July 2026)
• Los Angeles County (Unincorporated): $17.81/hour
• Pasadena: $18.04/hour
• Santa Monica: $17.81/hour

Many Cities’ Minimum Wage Will Increase on January 1, 2026

Here are some California cities that will raise their minimum wage effective January 1, 2026:

• Belmont: $18.95/hr
• Burlingame: $17.86/hr
• East Palo Alto: $17.90/hr
• El Cerrito: $18.82/hr
• Half Moon Bay: $17.91/hr
• Hayward: $17.79/hr (26 or more employees), $16.90/hr (25 or fewer employees)
• Los Altos: $18.70/hr
• Menlo Park: $17.55/hr
• Mountain View: $19.70/hour
• Novato: $17.73/hr (100 or more employees), $17.46/hr (26 to 99 employees), $16.90/hr (25 or fewer employees)
• Palo Alto: $18.70/hr
• Petaluma: $18.31/hr
• Redwood City: $18.65//hr
• Richmond: $19.18/hr (if the er pays <$1.50/hr toward medical benefits), $17.68/hr (if the er pays at least $1.50/hr toward medical benefits)
• San Carlos: $17.75/hr
• San Diego: $17.75/hour
• San Jose: $18.45/hour
• San Mateo: $18.60/hr
• San Mateo County (unincorporated areas): $17.95/hr
• Santa Clara: $18.70/hr
• Santa Rosa: $18.21/hr
• South San Francisco: $18.15/hr
• Sunnyvale: $19.50/hr
• West Hollywood: $20.25/hr (non-hotel workers)

What to Know About City Minimum Wage

Generally, employers must pay the higher minimum wage rate between state and local laws. Employers with workers in these locations must ensure compliance by updating wage rates and displaying an updated local Minimum Wage poster in a visible location for employees. Be careful: this increase will impact your overtime obligations, as well, among other impacts. And remember, if you have a remote worker performing services from their living room in one of these cities, you must pay the employee that local minimum wage. In case you are curious, the city minimum wage is not the number you will use to calculate salary minimums for exempt employees.

Please let us know if you have any questions!

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