Understanding Minimum Salary Requirements in California
- Dan Olaco
- Feb 23
- 2 min read
California’s salary and wage laws are complex and frequently updated. If you are a business owner with employees, understanding these regulations is important to ensure compliance and clarity regarding employee pay.
1. Statewide Minimum Wage (Hourly Pay)
As of January 1, 2026, the California statewide minimum wage is:
$16.90 per hour applies to nearly all employers in California, except those covered by a higher minimum wage specific to an industry or locality.
This is the minimum wage employers must pay, but many California cities and counties set higher minimum wages that often exceed the state rate, and there may be different industry minimum wage rates.
Local Minimum Wages
Several jurisdictions have established higher minimum wages, including, but not limited to:
San Francisco: $19.18 as of January 1, 2026
Los Angeles: $17.87 as of January 1, 2026
Other cities and counties may have different rates; please check with your local city and county for the local minimum wage rates.
Local rates are subject to change and may be adjusted mid-year; always verify current rates with the applicable city or county agency.
2. Minimum Annual Salary for Exempt Employees
Not all employees are paid hourly. Salaried employees may be classified as exempt, which means they are not entitled to overtime pay or certain wage-hour protections. California law sets a minimum salary requirement for exempt status.
How It Works
To be exempt under California wage laws (for executive, administrative, or professional exemptions), an employee must:
Perform primarily exempt job duties, and
Earn a minimum salary equal to at least twice the state minimum wage based on a 40-hour workweek.
Figures for 2026
State minimum wage: $16.90 per hour
Minimum exempt salary: $70,304 per year.
(calculated as $16.90 × 2 × 40 hours/week × 52 weeks)
This amount increases whenever the state minimum wage rises; check this annually.
If an exempt employee’s salary falls below this threshold, you may need to reclassify them as non-exempt, making them eligible for overtime, meal breaks, and rest breaks.
3. Why Salary Minimums Matter
Paying a salaried employee below the exempt threshold may expose you to wage-hour claims.
Minimum wage and exempt salary thresholds may increase annually based on statutory schedules and inflation adjustments.
4. Other Wage Considerations
Federal Minimum Wage
The federal minimum wage is $7.25 per hour, but California employers must pay the higher state or local minimum wage.
Industry-Specific Rates
Certain industries (such as fast food and health care) may have separate minimum wage standards that exceed the state's general minimum wage.
Resources for more information
State of California Department of Industrial Relations - Minimum Wage Frequently Asked Questions
U.S. Department of Labor - Minimum Wage | U.S. Department of Labor
City of Los Angeles Office of Wage Standards - Office of Wage Standards | Wages LA
City of San Francisco Office of Labor Standards Enforcement - Minimum Wage Ordinance | SF.gov
Final Thoughts
Minimum wage and salary laws can be costly for a business if not properly followed. It is important to stay up to date on the latest local, state, and federal minimum-wage guidelines, as they change annually.