On August 13, 2026, California's Labor Commissioner's Office announced that the state minimum wage will go up to $17.40 an hour on January 1, 2027. Right now it is $16.90. The state Department of Finance certified the new rate on July 31, 2026. Most workers in California must be paid at least this much. That includes workers paid by the piece.
The raise changes something else, too. It moves the pay line for workers an employer can leave out of overtime. Starting January 1, 2027, a salaried worker must make at least $72,384 a year before an employer can call that worker exempt. That figure is two times the minimum wage for a 40-hour week (Lab. Code § 515(a)).
Here is a common situation. Imagine you are an assistant manager at a store. You make $60,000 a year on salary. You work 50 hours most weeks. Your boss says you get no overtime because you are salaried. That is not how the law works.
Being paid a salary does not by itself make a worker exempt. The employer must also look at what the worker really does all day. California law lists three kinds of exempt jobs: executive, administrative, and professional. In plain words, that means manager work, high-level office work that helps run the business, or work in a licensed profession.
A job title alone is not enough. Calling a job "administrative" does not make it exempt. The worker must really do that kind of work, and must regularly make real decisions on their own (Lab. Code § 515(a)). If the salary is too low, or the daily work does not match, the worker is still owed overtime. Salaried does not automatically mean no overtime.
Source: https://www.dir.ca.gov/DIRNews/2026/2026-66.html Current minimum wage: https://www.dir.ca.gov/dlse/faq_minimumwage.htm Labor Code § 515: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB§ionNum=515.