California Minimum Wage: Rates, Local Rules, Exceptions

The first payroll I set up for a California team was wrong inside a month. I had the state rate from a news headline, typed it into the pay run and stopped thinking about it. The employee worked in the City of Los Angeles, which sets its own higher rate. I owed back wages, and the fix cost more in bookkeeping time than the wage gap itself.

That is California minimum wage in one story. There is a state floor, a city rate stacked on top of it across most of the population centers, and two industry rates written into statute that override both. Getting the state number right is the easy part of the job.

This page gives you the rates that can reach a California paycheck: the state floor, city and county ordinances, and the fast food and health care rates, plus what to change when one of them rises. The figures come mostly from the California Department of Industrial Relations (DIR), the Department of Finance, and the cities that passed the ordinances.

The Current California Minimum Wage

The California minimum wage is $17.40 per hour from January 1, 2027 ($16.90 through December 31, 2026), and it applies to every employer regardless of the number of employees. The Department of Industrial Relations states the coverage rule directly in its minimum wage FAQ: employers must pay all employees at least the minimum wage per hour even if they only have one employee.

The two-tier system many owners still remember is gone. Between 2017 and 2022 employers with 25 or fewer workers paid a lower rate than larger ones. Those tiers merged on January 1, 2023. Since then the single statewide figure has been adjusted for inflation using the CPI-W, the national consumer price index for urban wage earners and clerical workers.

The state wage order also sets the only credits California permits against the minimum wage. Meals and lodging may be credited, meaning their value counts toward the wage, but only under a voluntary written agreement and only up to set amounts. For 2026 those caps are $6.10 for breakfast, $8.42 for lunch, $11.28 for dinner, and $79.46 per week for a room occupied alone.

The Next Scheduled Increase

The state rate rises to $17.40 per hour on January 1, 2027. The Department of Finance certified the increase on July 31, 2026, and the Department of Industrial Relations announced it on August 13, 2026. That is a $0.50 step from the current figure.

The mechanism is worth understanding because it makes every future increase predictable. Under Labor Code Section 1182.12, the Director of Finance must determine by August 1 of each year whether to adjust the rate for the following January 1, based on the CPI-W.

Two guardrails sit on that calculation. The rate can never be lowered, even after a year of negative inflation. And no single adjustment may exceed 3.5 percent. So the worst case for a California payroll budget is roughly 3.5 percent on the wage floor, announced about five months ahead.

Tipped Employees and the Tip Credit

California allows no tip credit. The tipped minimum cash wage is the full minimum wage: $17.40 per hour from January 1, 2027 ($16.90 through December 31, 2026). Asked whether tips count, the Department of Industrial Relations gives a one-word no and adds that an employer may not use an employee's tips as a credit toward its obligation to pay the minimum wage per hour.

This is one of the sharpest breaks from federal practice. Under the federal system an employer may pay a $2.13 cash wage and claim a tip credit for the rest. In California a server earns the full hourly floor from the employer, and every tip sits on top of that. Tips are the property of the employee under Labor Code Section 351, and the employer may not take any part of them.

The practical consequence shows up in labor cost modeling. A restaurant moving into California from a state that allows the federal $2.13 cash wage should expect base front-of-house wage cost for tipped staff to rise roughly eightfold, from $2.13 to $17.40 an hour from January 1, 2027 ($16.90 through December 31, 2026).

City and County Minimum Wages

Local ordinances are the part employers miss. California expressly permits cities and counties to set a higher minimum wage, and dozens have. Where local, state and federal rules overlap, the Department of Industrial Relations says the employer must follow the stricter standard, meaning the one most beneficial to the employee.

Coverage generally follows the work, not the office. In both the City of Los Angeles and the City of San Diego, an employee is covered after as little as two hours of work inside city limits in a week. A mobile technician, a delivery driver or a hybrid employee can pull a city rate into a payroll that never planned for one.

Notice the two adjustment calendars. The state moves every January 1. San Francisco and most Los Angeles area ordinances (West Hollywood's general rate is the exception) move every July 1, which means an employer with staff there changes rates twice a year, not once. Most South Bay and Peninsula cities adjust on January 1 alongside the state, and so does San Diego.

Some cities also run a separate, higher wage for hotel and hospitality workers. Santa Monica sets $25.00 per hour for hotels and businesses operating on hotel property, effective July 1, 2026. Los Angeles runs a hotel schedule of its own.

San Diego added a hospitality minimum wage for covered hotels, event centers and amusement parks that took effect July 1, 2026. If you run a hotel, read the ordinance rather than the general rate.

Bay Area and Northern California City Rates

There is no single Bay Area minimum wage. Nearly every large Bay Area city runs its own ordinance, from $17.34 in Oakland to $20.34 in Emeryville. The figures below come from the UC Berkeley Labor Center inventory, the list the Department of Industrial Relations points employers to. Rows marked as confirmed were also checked against the city's own posted notice.

A county name rarely settles the rate; the city usually does. Alameda County has no countywide ordinance, but six of its cities do. Marin County's only ordinance is Novato's. Contra Costa County's are Richmond and El Cerrito. Sonoma County's are Santa Rosa, Petaluma and Sonoma. The San Mateo County and Los Angeles County ordinances reach unincorporated areas only.

Cities That Follow the State Rate

Sacramento, Fresno, Bakersfield, Riverside, San Bernardino, Irvine and every other Orange County city have no general minimum wage ordinance, so the state rate applies to most employers there: $17.40 from January 1, 2027 ($16.90 through December 31, 2026). The same goes for Los Gatos and for Long Beach's general workforce. No ordinance also means no July adjustment: these payrolls move once a year, on January 1.

Long Beach is the trap in that list. The city sets no general minimum wage, but its compliance page puts hotel workers at $26.50 per hour effective July 1, 2026 under the voter-approved ordinance in Municipal Code Chapter 5.48. A hotel payroll in Long Beach follows that notice, not the state floor.

Concessionaire workers at the Long Beach Airport and the Convention Center sit on a separate schedule again, under Chapter 16.60 of the same code. If you hold one of those concessions, the city page is where the current figure lives.

Anaheim is the Orange County exception, and a narrow one. Measure L, now Chapter 6.99 of the Anaheim Municipal Code, sets $21.13 per hour from January 1, 2026 for hotels, motels, theme parks and the restaurants, shops and venues in or next to them in the Anaheim Resort. It covers only employers with more than 25 employees that receive a city tax rebate or are a contractor, tenant or affiliate of one that does.

According to the City of Anaheim's Measure L notice, that rate rises every January 1 by the greater of 2 percent or local inflation, measured by the Los Angeles-Long Beach-Anaheim consumer price index. Outside Measure L, Anaheim employers follow the state rate unless an industry rate applies.

Fast Food, Health Care, and Agriculture

Two California industries have their own statutory minimum wage that overrides the state floor, and one industry that employers often assume has a lower rate does not. Fast food and health care are set by statute. Agriculture is not.

Fast Food: $20.00 Per Hour

Covered fast food restaurant employees must be paid at least $20.00 per hour, effective April 1, 2024, under AB 1228. Coverage is narrower than the name suggests. The DIR fast food FAQ sets three tests: a limited-service restaurant where customers order and pay before eating, part of a national chain, and primarily selling food and drink for immediate consumption.

Labor Code Section 1474 puts a number on the chain test: more than 60 establishments nationally, sharing a common brand or standardized decor, marketing, packaging, products and services. A chain of exactly 60 locations falls outside the definition, which is why the count is worth checking against the statute rather than a press summary.

An independent restaurant is not covered. Neither is a full-service restaurant with table service, nor a chain of 60 or fewer locations. Statutory exemptions also remove some locations inside covered chains, such as an establishment that produces and sells bread as a stand-alone menu item.

The exempt salary floor for a covered fast food manager, the minimum salary the job must pay to be exempt from overtime, is $83,200. That figure is two times the $20.00 rate for full-time work.

The Fast Food Council may raise the rate once a year by the smaller of 3.5 percent or the increase in the consumer price index. As of the last-checked date the DIR FAQ still shows $20.00 with no adopted increase, so the rate has held since April 2024.

Health Care: $19.28 to $25.00 by Facility Type

Covered health care facilities have paid a higher minimum wage since October 16, 2024 under SB 525, on a schedule that varies by facility type. Every facility type in the table below reached a new step on July 1, 2026. The DIR health care FAQ holds the full schedule through 2035.

Coverage reaches further than clinical staff. Support roles at a covered facility, including janitorial, food service, security and clerical work, fall inside the law when the work supports the provision of health care. The exempt salary floor for covered health care workers is the greater of 1.5 times the applicable health care rate or two times the state minimum wage.

Agriculture: No Separate Rate

There is no lower agricultural minimum wage in California. Farm workers earn the same state floor as everyone else ($17.40 from January 1, 2027; $16.90 through December 31, 2026), and the same local rate where a city ordinance reaches the work site. What differs for agriculture is overtime, not the wage floor.

One narrow monthly minimum does exist. Sheepherders and goat herders on a regularly scheduled 24-hour, seven-day-a-week on-call shift are owed $3,004.50 per month effective January 1, 2026, under Wage Order 14 of the Industrial Welfare Commission (IWC). The same order says paying that monthly figure does not relieve the employer of overtime, and meals or lodging may not be offset against it.

Youth and Learner Wages

California has no youth minimum wage. The Department of Industrial Relations states that there is no distinction made between adults and minors when it comes to payment of the minimum wage, so a 16-year-old on a summer shift earns the same state rate as a 40-year-old: $17.40 per hour from January 1, 2027 ($16.90 through December 31, 2026).

There is one training-style exception, and it is not about age. A learner of any age may be paid 85 percent of the minimum wage, rounded to the nearest nickel, during their first 160 hours of employment in an occupation in which they have no previous similar or related experience. At $17.40, from January 1, 2027, that is $14.79 before rounding, which lands on $14.80 per hour. At the $16.90 rate through December 31, 2026 it is $14.365, which lands on $14.35.

The 160 hours are counted per occupation, not per employer, and the clock does not restart when someone changes jobs into work they have already done. Minors also face separate work permit rules and hour limits that have nothing to do with the wage rate.

The Posting Requirement

Every California employer must post the current minimum wage order where employees can read it. The official notice is MW-2026, and its own instruction line reads: please post next to your IWC industry or occupation order. The notice is free from the Department of Industrial Relations and should never be bought from a poster vendor.

Three points get missed. The wage order notice is separate from the industry or occupation order it sits beside, and you need both. Employers covered by the fast food or health care rate must post the matching supplement to the wage order in addition to the general notice.

The third point concerns remote employees who never visit a physical site. They still need a way to read the notices, which in practice means sending them electronically.

Posting an expired notice counts as failing to post. Because the state rate changes every January 1, the wage order notice is reissued every year with a new number, and last year's copy on the break room wall is a finding waiting to happen. The same replacement discipline applies to the rest of your required workplace postings.

How California Compares to the Federal Rate

The federal minimum wage is $7.25 per hour and has not moved since July 24, 2009. California's $17.40 from January 1, 2027 sits $10.15 above it ($9.65 at the $16.90 rate through December 31, 2026), which means the federal figure is functionally irrelevant to California payroll: no California employer will ever pay it, and no California employee will ever be entitled to only that.

The federal rate still matters in two places. It sets the baseline that federal enforcement uses, and it anchors the multi-state comparison if you employ people outside California. The Wage and Hour Division of the U.S. Department of Labor publishes the federal rate and its rules.

The tip rule is where the gap gets dangerous for employers moving into California. A payroll configuration built around the federal tip credit will underpay every tipped California employee from the first pay run. Rebuild the pay rates rather than importing the settings.

What to Do When a Rate Rises

A rate increase is a five-item task, and only the first item is obvious. Raising the hourly rate is the part everyone does; the exempt salary floor and the written notice are the parts that generate claims.

The exempt salary step is the one that quietly breaks. A salaried manager who cleared the floor in one year can fall below it the next without anyone touching their pay, because the floor moved. The moment that happens they are non-exempt, and you owe them daily overtime, which in California starts after eight hours worked in a single day.

Run the check against the duties test as well, since the salary threshold is only half of the exemption.

Keep the paper trail. Store the notice you sent, the effective date, and the version of the poster you put up. FirstHR is an onboarding and HR platform, not a payroll provider, so it holds the employee records and the acknowledgments rather than the pay run itself.

One more habit worth building: put a calendar entry on August 1 and another on June 1. August 1 is the statutory deadline for the Director of Finance to calculate next January's rate. June 1 gives you a month to catch the July 1 local increases before they hit. That pair of reminders helps you catch the rate changes behind many wage claims before the first short paycheck goes out.

Frequently Asked Questions