California Minimum Wage 2027: $17.40 an Hour, and What to Check on Your Paycheck

California's statewide minimum wage rises to $17.40 per hour on January 1, 2027, up from $16.90 in 2026, and it applies to every employer regardless of size. If you work in the City of Los Angeles, your floor is already higher: $18.42 per hour since July 1, 2026. Your employer must pay whichever minimum is highest where you work, for every hour you work, and tips cannot count toward it.

At a glance

• The statewide minimum wage is $17.40 per hour from January 1, 2027, replacing $16.90. It applies to every employer, whatever its size.
• A formula in the statute set the increase. The Department of Finance measured a 2.99 percent rise in the U.S. consumer price index for wage earners, below the 3.5 percent cap in the statute.
• To be exempt from overtime as an executive, administrative or professional employee, you must earn at least $72,384 a year from January 1, 2027, and your actual duties must also meet the test.
• In the City of Los Angeles, the minimum is $18.42 since July 1, 2026. In unincorporated Los Angeles County it is $18.47. Pasadena is $18.57 and Malibu is $17.91. The City and County rates change again on July 1, 2027.
• Some industries have their own higher floors: $20 for covered fast food workers, $19.28 to $25 for covered health care workers, and $25.00 plus a health benefit payment for workers at large hotels in the City of Los Angeles.
• The minimum applies to each hour worked, including if you are paid by the piece or on commission. Your employer cannot use your tips to reach it.
• If you are underpaid, you can recover the unpaid wages, an equal amount again as liquidated damages, interest, and your attorney's fees. A minimum wage claim generally has a three-year deadline.

What will California's minimum wage be in 2027?

$17.40 per hour, starting January 1, 2027. The state's Department of Industrial Relations, known as DIR, announced it this way: "Beginning January 1, 2027, California's statewide minimum wage will increase to $17.40 per hour, helping wages keep pace with inflation".

The rate it replaces is $16.90, which has applied to all employers since January 1, 2026. The Department of Finance's letter setting the new figure says the increase "shall be implemented for all employers on January 1, 2027."

That phrase, all employers, matters. For years California ran two schedules, with a lower rate for employers with 25 or fewer workers. That split is over. The current state wage order says "Every employer, regardless of the number of employees, shall pay to each employee wages not less than" the minimum. A business with one employee owes the same $17.40 as a business with ten thousand.

Minors are covered too. DIR's own guidance says "There is no distinction made between adults and minors when it comes to payment of the minimum wage."

How was the 2027 increase decided?

By a formula written into Labor Code section 1182.12. Each year, on or before August 1, the Director of Finance must calculate an adjusted minimum wage. The increase is the lesser of 3.5 percent and the change in the U.S. Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), comparing the latest July-to-June period with the one before it. The result is rounded to the nearest ten cents and takes effect the following January 1.

For 2027, the Department of Finance found that the average U.S. CPI-W for July 1, 2025 to June 30, 2026 rose 2.99 percent over the prior 12 months. That is under the 3.5 percent cap, so the full 2.99 percent applied. Its letter is dated July 31, 2026.

The statute also protects you if prices fall. If the index goes negative, "there shall be no increase or decrease in the minimum wage" the next January. The state minimum wage does not go down.

Which minimum wage applies to you in Los Angeles?

The highest one that covers you. DIR puts the rule plainly: "the employer must follow the stricter standard; that is, the one that is the most beneficial to the employee." Where a city or county has adopted a higher minimum, "employees must be paid the local wage where it is higher than the state or federal minimum wage rates."

State law backs that up. Labor Code section 1197 says the minimum wage fixed "by any applicable state or local law, is the minimum wage to be paid to employees, and the payment of a lower wage than the minimum so fixed is unlawful." A city minimum wage is not a suggestion. Paying below it is a violation of state law as well.

The federal minimum wage, $7.25 an hour, is almost never the number that matters in California. Federal law itself says it does not "excuse noncompliance with any Federal or State law or municipal ordinance establishing a minimum wage higher" than the federal one.

Here are the rates that apply across Los Angeles, as published by each government on the date of this article.

Other cities in Los Angeles County, including Santa Monica and West Hollywood, have their own minimum wage ordinances. We did not include their figures because we could not confirm them on the cities' own published notices before this article went up. If you work in one of those cities, check the notice your employer is required to post, or the city's website.

Does the City of Los Angeles minimum wage go up in 2027?

Yes, but not on January 1. The City of Los Angeles adjusts its minimum wage on July 1 each year, based on the consumer price index for the Los Angeles area. The Office of Wage Standards says "The adjusted rate will be announced on February 1st of each year and become effective on July 1st of each year." The July 1, 2027 rate has not been announced yet.

Until then, the city rate is $18.42. The city's FAQ says it covers anyone who performs "at least two hours of work in a particular week within the geographic boundaries of the City of Los Angeles for an Employer" and who is entitled to the state minimum wage. Where you work is what counts, not where your employer is based. Employees of federal and state agencies, other cities, counties, school districts and other public entities are not covered. The FAQ says the ordinance "does not apply to employees of other government agencies, including Federal agencies, State agencies, cities, counties, school districts, and any other public entities."

So for the hourly rate itself, January 1, 2027 changes nothing for most people working inside Los Angeles city limits, because the $18.42 city rate is already above the new $17.40 state rate. Some things still move for city workers that day, all covered below: the exempt salary threshold, and the wage order rules keyed to the state minimum wage, such as the tools and equipment threshold and the caps on meal and lodging credits. Reporting-time pay is different. It is paid at your regular rate, and a City of Los Angeles worker must already be paid at least $18.42, so for a city worker reporting-time pay does not change on January 1. The January hourly increase matters most if you work somewhere in California with no local ordinance, or in a city whose own rate falls below $17.40.

Hotel workers. The City of Los Angeles has a separate, higher wage for hotels with 60 or more guest rooms, and for hotels with 50 or more rooms in the Airport Hospitality Enhancement Zone. From July 1, 2026 to June 30, 2027, the rate is $25.00 per hour plus a $4.25 per hour health benefit payment. From July 1, 2027, it becomes $25.50 plus $6.00. The city amended that schedule in an ordinance passed May 26, 2026. If your hotel does not provide health benefits, the ordinance says you are owed the wage rate plus "an additional wage rate equal to the health benefit payment". If it pays less toward health benefits than required, "the difference shall be paid to the Hotel Worker as an additional hourly wage."

Airport workers. For employees of employers servicing the airport, the same ordinance sets $25.00 per hour from July 1, 2026 and $25.50 from July 1, 2027 as the wage where the employer provides health benefits. The employer's health benefit payment must be at least $7.65 an hour, the amount in place since July 1, 2025, and at least $8.15 an hour from July 1, 2027. If the employer pays less toward health benefits than required, the ordinance says "the difference shall be paid to the Employee as an additional hourly wage." If your employer provides no health benefits, the full payment ($7.65 an hour now, $8.15 from July 1, 2027) must be paid to you as an additional hourly wage.

What about unincorporated Los Angeles County, Pasadena and Malibu?

Unincorporated Los Angeles County is the part of the county that sits outside any city. There, the minimum wage rose from $17.81 to $18.47 on July 1, 2026. The county says the rate "will increase each year on July 1," and the 2027 figure is not out yet. It applies to anyone who works "at least two hours in a one-week period within the unincorporated areas of Los Angeles County."

Pasadena requires "not less than $18.57 per hour (in addition to any tips received)" from July 1, 2026, for employees who work two or more hours a week in the city.

Malibu set its rate at $17.91 from July 1, 2026, "for all employers."

What is the exempt salary threshold for 2027?

$72,384 a year, from January 1, 2027. DIR shows the arithmetic: "$17.40 x 2 x 40 hours per week x 52 weeks per year = $72,384."

This figure matters more than the hourly rate for many salaried workers, because it decides who is owed overtime. Under Labor Code section 515(a), the executive, administrative and professional exemptions require a monthly salary "equivalent to no less than two times the state minimum wage for full-time employment." When the minimum wage rises, the salary floor rises with it.

Salary is only half the test. You must also be "primarily engaged in the duties that meet the test of the exemption," and primarily "means more than one-half of the employee's worktime." A job title is not a duty. DIR's announcement says it directly: "Employees must also satisfy the duties and other requirements applicable to the specific exemption."

If you are paid a salary below $72,384 a year in 2027 and your employer treats you as exempt, that classification is worth a second look. If you meet the salary but spend most of your day on routine work, the classification may also be wrong. Our guide to employee misclassification in California explains how the tests work, and unpaid overtime in California covers what a misclassified worker may be owed.

Two exemptions follow their own numbers. The computer software exemption and the licensed physician exemption are adjusted by DIR each October 1, effective the following January 1. DIR had not published the 2027 figures when this article went up. For 2026, the software exemption's minimum hourly rate is $58.85, with a minimum monthly salary of $10,214.44 or annual salary of $122,573.13, and the physician exemption's minimum hourly rate is $107.17. Health care workers covered by the health care minimum wage have their own exempt salary floor too: 150 percent of the health care minimum wage, or 200 percent of the state minimum wage, whichever is greater.

Is California's minimum wage $20 an hour?

Only for some workers. The $20 figure comes from Labor Code section 1475, which set "twenty dollars ($20) per hour, effective April 1, 2024" for covered fast food restaurant employees. The Fast Food Council can raise that rate each year, but no higher rate appears on DIR's published pages as of this article. DIR's guidance still says covered workers "must be paid at least $20.00 per hour."

Covered health care workers have a separate schedule under Labor Code section 1182.14, the law passed as SB 525. During 2027:

• Large health systems, dialysis clinics, and health facilities owned, affiliated with or run by Los Angeles County stay at $25 per hour through December 31, 2027.
• Intermittent clinics, community clinics, rural health clinics, and urgent care clinics owned by or affiliated with a community or rural health clinic are at $22 per hour through June 30, 2027, then $25 from July 1, 2027. Clinics in this group can apply for "a 12-month delay in schedule" of the health care minimum wage. If the state issues a clinic a waiver, the law says the scheduled dates on or after the waiver takes effect "are postponed by 12 months for that covered health care facility", and a clinic can receive waivers in consecutive years. So a clinic with a waiver may owe less than the $22 or $25 shown here. The clinic must then post a copy of the waiver where employees will see it, and give each covered worker a written notice stating the minimum wage that applies. Other covered clinics are not in this group and follow one of the other schedules.
• Most other covered health facilities stay at $23 per hour through June 30, 2028.
• Hospitals with a high share of government payers, independent hospitals with an elevated share of government payers, rural independent hospitals, and facilities owned, affiliated with or run by a county with fewer than 250,000 people are at $19.28, then $19.95 from July 1, 2027. "Rural independent" has a set meaning in the law: a hospital that is not part of an integrated health care delivery system, is not owned, controlled, or operated by any parent entity with two or more separately licensed hospitals, and also meets one of the law's rural tests. Being located in a small county does not by itself put a facility in this group.

For covered health care employment, those rates "constitute the state minimum wages" for all purposes.

A local minimum wage for all workers still counts. DIR's guidance says a city or county cannot pass a minimum wage only for covered health care workers, but a general local minimum that covers all employees applies to them as well. In that case, DIR says, "The covered health care facility then must pay the higher, local minimum wage." Our guide to the California health care worker minimum wage walks through who counts as covered.

Can your employer count your tips toward the minimum wage?

No. DIR's answer starts with that word: "No. An employer may not use an employee's tips as a credit toward its obligation to pay the minimum wage per hour."

The statute goes further. Labor Code section 351 declares that every gratuity "is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for."

So if you are a server, bartender or valet in Los Angeles, your hourly pay must reach at least $18.42 before a single tip is counted. California has no lower "tipped minimum wage."

Does the minimum wage apply to every hour you work?

Yes. The state wage order requires employers to pay the minimum "per hour for all hours worked." The industry wage orders repeat the point for workers who are not paid by the hour. Wage Order 4, for example, requires the minimum "for all hours worked in the payroll period, whether the remuneration is measured by time, piece, commission, or otherwise."

That has two practical consequences:

• Piece-rate and commission workers are covered for every hour too. According to DIR's announcement, "most California workers" must be paid at least the minimum wage, "including those paid on a piece-rate basis." For piece-rate pay, Labor Code section 226.2 goes further: "Employees shall be compensated for rest and recovery periods and other nonproductive time separate from any piece-rate compensation." So piece-rate pay that looks high enough when divided across all your hours can still leave you owed for that time.
• Unpaid time is unpaid minimum wage. Minutes spent opening, closing, waiting, or working through a meal break are hours worked. If they were never paid, that is a minimum wage violation, and our guide to working off the clock in California explains what counts.

There are narrow exceptions. Under state law, a learner with no similar experience may be paid 85 percent of the minimum for their first 160 hours. In the City of Los Angeles, the city's FAQ describes the 85 percent rate only for employees aged 14 to 17, during their first 160 hours. DIR's examples of exempt workers, which it introduces with "such as," include "outside salespersons, individuals who are the parent, spouse, or child of the employer, and apprentices regularly indentured under the State Division of Apprenticeship Standards." With few other exceptions, the right is firm. DIR says the minimum wage "cannot be waived by any agreement, including collective bargaining agreements."

What else goes up when the minimum wage goes up?

Several wage rules are built on the minimum wage, so they move when it moves. California has separate wage orders for different industries, so check the one for your job. The examples below are from Wage Order 4:

• Tools and equipment. Your employer must provide and maintain tools or equipment the job requires. The exception is an employee "whose wages are at least two (2) times the minimum wage," who may be required to supply the hand tools customary for the trade. When the minimum rises, so does that line.
• Reporting-time pay. If you report for work as required but are not put to work, or are given less than half your usual or scheduled day, you are owed half that day, never less than two hours or more than four, "at the employee's regular rate of pay, which shall not be less than the minimum wage."
• Meals and lodging credits. An employer can count meals or lodging toward the minimum only with "a voluntary written agreement," and only up to capped amounts. By statute, DIR must raise those caps by the same percentage as the minimum wage. DIR had not yet published the 2027 caps when this article went up.

What should you check on your first paycheck of 2027?

If you work outside a city with a higher local rate, your first full paycheck after January 1, 2027 should show an hourly rate of at least $17.40. A pay period that starts in December and ends in January needs a closer look. Under Labor Code section 226(a)(9), your pay stub must list "all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate." If the rate changed partway through the pay period, both rates, and the hours at each, should appear.

A short checklist:

1. Find the rate on your pay stub. Compare it with the highest minimum that applies to where you work, using the table above.
2. Count your hours. Multiply your hours worked by the minimum rate. If your gross pay before tips is lower, something is wrong. Passing this check does not mean you were paid for all your time. Hours you worked but were never recorded are still owed, and if you are paid by the piece, your employer must pay you for rest and recovery periods and other nonproductive time separate from your piece-rate pay.
3. Look at your salary if you are treated as an exempt executive, administrative or professional employee. For those three exemptions, a salary below $72,384 a year in 2027 means the exemption does not hold. Meeting the salary is not enough on its own. Section 515(a) also requires that the employee "customarily and regularly exercises discretion and independent judgment in performing those duties."
4. Check the posting. Employers must post the statewide minimum wage order and their industry wage order "in an area accessible to employees." City of Los Angeles employers must also post the notice the Office of Wage Standards publishes each year, in 12 listed languages (English, Spanish, Chinese (Cantonese and Mandarin), Hindi, Vietnamese, Tagalog, Korean, Japanese, Thai, Armenian, Russian and Farsi) and in any other language spoken by at least five percent of the employees at the workplace.
5. Keep copies. Save your pay stubs and write down your hours. A record you made at the time is worth far more than one you reconstruct later.

What can you recover if you are paid less than the minimum wage?

More than the missing wages. California's remedies are designed so that underpaying is expensive.

• The unpaid wages, plus interest and fees. Labor Code section 1194 lets any employee paid less than the legal minimum recover "the unpaid balance of the full amount of this minimum wage or overtime compensation, including interest thereon, reasonable attorney's fees, and costs of suit." That applies "Notwithstanding any agreement to work for a lesser wage."
• Liquidated damages. Section 1194.2 adds "an amount equal to the wages unlawfully unpaid and interest thereon." In practice, that can double the minimum wage portion of the claim. It covers minimum wage, not overtime, and a court or the Labor Commissioner may reduce or deny it if the employer shows it acted in good faith and had reasonable grounds for believing it was not violating the minimum wage law.
• Civil penalties. Under section 1197.1, an employer that pays less than an applicable state or local minimum faces a penalty of $100 per underpaid employee per pay period for an intentional first violation, and $250 for each later one, on top of the wages owed. The Labor Commissioner can issue a citation to collect this penalty. The statute says the wages, liquidated damages and section 203 penalties recovered under it "shall be paid to the affected employee".
• Waiting-time penalties. If you have left the job and your employer willfully failed to pay final wages on time, section 203 continues your daily wage as a penalty for up to 30 days. Our guide to the California final paycheck law explains the deadlines.
• Pay stub penalties. A knowing and intentional pay stub violation under section 226 carries $50 for the first pay period and $100 for each later one, up to $4,000, plus attorney's fees.

Which of these apply depends on your facts. Our guide to wage theft in California walks through the recovery routes in more detail.

Ready to talk it through?

If your pay did not change when the law did, or you have been paid below the local rate for months, you may have a claim for more than the difference. Tell us what happened and we will review it free. Contact us for a confidential review.

How long do you have to file a minimum wage claim in California?

Generally three years. The Labor Commissioner's wage claim page lists "three years for violations of minimum wage." In court, Code of Civil Procedure section 338(a) sets three years for "An action upon a liability created by statute, other than a penalty or forfeiture." Under the unfair competition law, Business and Professions Code section 17208 allows four years. That longer reach is for restitution of unpaid wages: Business and Professions Code section 17203 lets a court order an employer "to restore to any person in interest any money or property" acquired through the unfair practice.

Penalty claims can run on different clocks. Deadlines can run early, so confirm yours with a lawyer rather than assuming you have time. Our page on important time limits for California employment cases lists the main ones.

How do you report an employer that is not paying the new minimum wage?

DIR says there are three ways to present a claim: "through the Labor Commissioner, through an alternative dispute resolution system such as arbitration (if required or allowed under an employment agreement), or through a lawsuit in court." DIR also says "California's labor laws protect all workers, regardless of immigration status."

If you work in the City of Los Angeles, you can also file with the Office of Wage Standards, including anonymously, through the MyLA 311 app, its website, or 1-844-WAGESLA (924-3752). The Office says it "will not ask a complainant or Employee their legal or immigration status or request supporting documents." In Pasadena, complaints go to the city's Department of Planning and Community Development.

Can you be fired for complaining about your pay?

No. Labor Code section 98.6 bars an employer from firing or retaliating against you because you "made a written or oral complaint that they are owed unpaid wages." If the employer acts against you within 90 days of the complaint, "there shall be a rebuttable presumption in favor of the employee's claim," and the employer faces a civil penalty of up to $10,000 per employee for each violation. The City of Los Angeles ordinance has its own 90-day presumption for workers who exercise their rights under it.

Reporting a pay violation to a government agency, or to someone at work with authority to fix it, is also protected under Labor Code section 1102.5. Our guide to Labor Code 1102.5 whistleblower protection explains how that works.

Frequently asked questions

What will California's minimum wage be in 2027?

California's statewide minimum wage will be $17.40 per hour from January 1, 2027, up from $16.90 in 2026. It applies to all employers regardless of size. Some cities and industries have higher minimums, and your employer must pay whichever one is highest where you work.

Is the Los Angeles minimum wage higher than California's?

Yes. The City of Los Angeles minimum wage has been $18.42 per hour since July 1, 2026, which is above the $17.40 state rate that starts January 1, 2027. The city adjusts its rate every July 1, and the July 1, 2027 figure is expected to be announced around February 1, 2027.

What is the California exempt salary threshold for 2027?

From January 1, 2027, an executive, administrative or professional employee must earn at least $72,384 a year to be exempt from overtime. That is two times the state minimum wage for 40 hours a week, 52 weeks a year. The job's duties must also meet the exemption test.

Is California's minimum wage $20 an hour?

Not for most workers. The $20 rate applies to covered fast food restaurant employees under Labor Code section 1475. The general state minimum wage is $17.40 from January 1, 2027. Covered health care workers have their own schedule, from $19.28 to $25 per hour during 2027.

Does the new minimum wage apply to small businesses?

Yes. California no longer has a lower rate for small employers. The $17.40 rate applies to every employer from January 1, 2027, regardless of the number of employees, and DIR's guidance says an employer with a single employee must pay the minimum wage too.

Can my employer use my tips to reach the minimum wage?

No. California does not allow a tip credit. Your employer may not use your tips to meet its minimum wage obligation, and Labor Code section 351 makes every gratuity the property of the employee it was left for. Your hourly pay must reach the full minimum that applies to you before any tips are counted.

How long do I have to claim unpaid minimum wage in California?

Generally three years, both for a Labor Commissioner wage claim and for a lawsuit based on the Labor Code. A claim under the unfair competition statute, Business and Professions Code section 17208, can reach back four years for restitution of unpaid wages. Penalty claims can run on different deadlines, so talk to a lawyer promptly.

The Law Offices of Jonathan J. Delshad is a Los Angeles based employment law firm representing employees across California in wrongful termination, discrimination, retaliation, harassment, and wage and hour matters. Representing employees is the core of the firm's practice. Mr. Delshad serves as Editor-in-Chief of the California Wrongful Termination Law Review and trained at Latham & Watkins. Recognition includes Super Lawyers (2022 to 2027), Best Lawyers (since 2017), and an Avvo 10.0 "Superb" rating. Reviewed for California employment law accuracy. Last updated: September 28, 2026.

Attorney advertising. This article is educational only and is not legal advice. Reading it does not create an attorney-client relationship, which exists only under a signed engagement agreement. Every case is different, and outcomes depend on the specific facts. Deadlines can run early, so consult a lawyer promptly about your situation.