ICYMI: California’s minimum wage set to increase to $17.40 per hour on January 1, 2027

NEWS RELEASE

OAKLAND-Beginning January 1, 2027, California's statewide minimum wage will increase to $17.40 per hour, helping wages keep pace with inflation and providing greater economic support to workers across the state.

The California Labor Commissioner's Office (LCO) is reminding workers and employers to prepare for this increase and understand the related wage, salary threshold and workplace posting requirements.

State law requires that most California workers be paid at least the minimum wage, including those paid on a piece-rate basis. Workers who are paid less than the minimum wage are encouraged to document the issue and raise it with their employer. If the matter is not corrected, workers may contact the LCO location in their area to file a wage claim.

Minimum salary requirement for exempt employees

The minimum wage increase also affects the minimum salary an employee must earn to meet part of the test for exemption from overtime requirements.

$17.40 x 2 x 40 hours per week x 52 weeks per year = $72,384

Beginning January 1, 2027, an employee must earn an annual salary of at least $72,384 to meet the salary threshold for exemption. Employees must also satisfy the duties and other requirements applicable to the specific exemption.

California law adjusts the statewide minimum wage annually based on inflation. On July 31, 2026, the Department of Finance certified the minimum wage increase for 2027, which was later announced by Governor Gavin Newsom.

Employers must post the statewide minimum wage order and the industry-specific wage order applicable to their workplace in an area accessible to employees. These notices are available to download and print from the California Department of Industrial Relations'(DIR's) workplace postings webpage.

Employers must also list employees' wage rates on their pay stubs and ensure that all employees receive at least the applicable minimum wage. Some California cities and counties have local minimum wage rates that are higher than the state rate. When applicable, employers must comply with the higher local rate.

Employers who do not comply with minimum wage laws may be liable for back wages, penalties and liquidated damages.

About the Labor Commissioner's Office

The LCO combats wage theft and unfair competition by investigating allegations of illegal and unfair business practices.

In 2020, the LCO launched "Reaching Every Californian," a multi-pronged outreach campaign that raises awareness of basic workplace protections and connects affected populations with information about their rights, employers' obligations and the LCO's enforcement procedures.

New worker protections that took effect in 2026 include the Workplace Know Your Rights Act. In addition to maintaining required workplace postings, employers must provide workers with an annual notice intended to increase awareness of workplace rights and protections.

California labor laws protect workers in most industries regardless of immigration status. Workers are not required to disclose their immigration status when filing wage claims or retaliation complaints or exercising other rights under California labor laws. The LCO does not ask about the immigration status of any individual seeking assistance or protection under California labor law.

Workers who have questions about labor laws enforced by the LCO can visit wagetheftisacrime.com or call the Labor Commissioner's helpline in English or Spanish at 833-LCO-INFO (833-526-4636) from 8 a.m. to 5 p.m. Monday through Friday.

The LCO is a division of DIR.

Californians can follow the Labor Commissioner on Facebook , Instagram and X .

Employers with questions on requirements may contact: [email protected]

Media Contact: [email protected], (510) 286-1161