California’s Director of Finance certified that the statewide minimum wage will increase from $16.90 to $17.40 per hour effective January 1, 2027.
As with every state-wide minimum wage increase, this will impact the minimum salary threshold for employees who are classified as “exempt” under California’s executive, administrative, and professional exemptions. Effective January 1, 2027, exempt employees must earn a salary of at least $72,384 annually ($1,392 per week). This is an increase from the 2026 threshold of $70,304 annually ($1,352 per week). Exempt employees must also meet the “duties” test to maintain their exempt status.
The California minimum wage increase does not affect any local jurisdictions’ minimum wage rate, so if a business is located within a geographical area that is governed by a higher local minimum wage (e.g., City of Los Angeles, West Hollywood), then the higher local minimum wage remains in affect for hourly non-exempt employees.
Additional information about the various state and local minimum wage requirements within California can be found on the DLSE’s website although the new minimum wage information has not yet been included on this webpage.
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