California minimum wage will rise to $17.40 an hour in 2027
The statewide rate goes up 50 cents on January 1, and the salary needed for overtime exemption climbs to $72,384.
Key numbers
- Current rate: $16.90 an hour
- New rate from January 1, 2027: $17.40
- Exempt salary minimum: $72,384 a year
California's statewide minimum wage will increase from $16.90 to $17.40 an hour on January 1, 2027, the Department of Industrial Relations announced on August 13, 2026.
The increase is automatic. State law adjusts the minimum wage each year for inflation, and the Department of Finance certified the new rate on July 31.
What it means in dollars
A full-time worker at 40 hours a week earns about $36,190 a year at the new rate, roughly $1,040 more than in 2026. After federal taxes, California income tax and the 1.3% SDI deduction, most of that raise still reaches the worker, because California withholds little or no state income tax at this income level.
Salaried workers and overtime
The change also raises the minimum salary for workers classified as exempt from overtime. Exempt employees must earn at least twice the state minimum wage for full-time work, which is $72,384 a year in 2027. Employees paid less than that generally must receive overtime, even if they are on salary.
Local rates can be higher
Many California cities and counties set their own, higher minimum wages. Employers must pay whichever rate is highest. Some industries, such as fast food and health care, also have separate minimum wage rules.
Workers who believe they are underpaid can file a wage claim with the California Labor Commissioner's Office.
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