As of January 1, 2025, California's statewide minimum wage is $16.50 per hour for all employers, regardless of company size, and it is adjusted upward each January 1 for inflation - so the figure for 2026 may be higher. That state floor is more than double the federal minimum of $7.25 per hour under the Fair Labor Standards Act (FLSA), which has not changed since 2009. Just as important: California does not allow a tip credit. Unlike federal law, employers here may never count an employee's tips toward the minimum wage. Tipped workers must receive the full California minimum wage in cash for every hour worked, plus any tips on top. Because California's rate changes annually and many cities set even higher local minimums, always confirm the current figure with the California Department of Industrial Relations before relying on a specific number.
California's statewide minimum wage
California's minimum wage is set by statute (Labor Code section 1182.12) and has climbed steadily for years. The schedule that phased in a $15 minimum for large employers reached full effect, and the law now ties the rate to inflation. Since January 1, 2023, California has used a single statewide rate for all employers - the old split between businesses with 25 or fewer employees and those with 26 or more no longer applies.
Each year, the state's Director of Finance reviews the change in the Consumer Price Index and adjusts the minimum wage accordingly, with the annual increase capped at 3.5 percent and rounded to the nearest ten cents. The rate was $16.50 as of 2025. Because the indexing happens automatically each January 1, the 2026 rate may have risen above that. Do not assume $16.50 is current - check the official Department of Industrial Relations minimum-wage page for the figure that applies right now.
Voters also weighed in: a 2024 ballot measure that would have accelerated increases to $18 was rejected, so the standard statewide floor continues to follow the inflation-indexing formula described above rather than a fixed $18 number.
How California compares to the federal minimum
The FLSA sets a national floor of $7.25 per hour. When a state minimum exceeds the federal minimum, employees are entitled to the higher state rate - and California's is far higher. The practical effect is that California workers rarely look to the federal number at all; the state and any applicable local minimum control.
The contrast is even sharper for tipped employees. Federal law lets employers pay a cash wage as low as $2.13 per hour and use a "tip credit" to make up the difference to $7.25, as long as tips actually close the gap. California flatly prohibits this. There is no separate, lower "tipped minimum wage" in California, and no tip credit of any kind.
Tips and the no-tip-credit rule
Under Labor Code section 351, tips are the sole property of the employee or employees to whom they are given. An employer cannot take any part of a gratuity, cannot deduct it from wages, and cannot use it as a credit against its obligation to pay the full minimum wage. So a server, bartender, or delivery driver in California must earn at least the full state (or higher local) minimum wage in direct wages for every hour, and keeps tips separately.
A few related rules follow from this:
No mandatory tip-outs to the house. Employers and most managers/supervisors cannot share in employee tips.
Tip pooling is allowed among employees in the chain of service, but it must be limited to eligible staff and cannot include the owner or agents of the employer.
Credit-card processing fees cannot be deducted from an employee's tips; the employer must pay the worker the full tip amount left by the customer.
Service charges are not tips. A mandatory service charge belongs to the employer unless it is distributed to staff, and it does not satisfy the minimum-wage obligation the way required wages do.
Industry-specific minimum wages
California has carved out two large sectors with their own, higher minimums that sit above the general statewide rate:
Fast-food workers. Under AB 1228, most employees at fast-food restaurants that are part of a national chain with 60 or more locations earn a sector minimum wage of $20.00 per hour (effective April 1, 2024). A Fast Food Council can raise this rate over time, so confirm the current figure.
Health-care workers. Under SB 525, covered health-care facility employees are subject to a separate minimum-wage schedule that phases in over several years. The applicable rate depends on the type of facility (for example, large health systems, dialysis clinics, smaller rural or county facilities), and the numbers step up on a set timeline. Because these rates vary by facility category and change on schedule, workers should verify the exact rate for their employer type with the Labor Commissioner.
Where one of these sector rates applies, it controls instead of the general statewide minimum - and a higher local city minimum could apply on top of that analysis.
City and county minimum wages
California is a home-rule-friendly state for wages: dozens of cities and counties set their own minimum wage above the statewide rate, and when a local minimum is higher, the employer must pay the local rate. These local ordinances frequently adjust on July 1 rather than January 1, and some have their own CPI indexing, so a worker may see two increases in a single year.
Cities and counties that commonly set higher local minimums include Los Angeles (city and county), San Francisco, West Hollywood, Berkeley, Emeryville, Oakland, San Jose, Mountain View, Cupertino, Sunnyvale, Santa Monica, Pasadena, San Diego, and many others. Several also maintain elevated rates for specific industries such as large hotels or airport employers. Because the list and the exact dollar amounts change often, check your city's or county's official wage page for the current local rate.
The rule of thumb: an employee is always entitled to the highest applicable rate among the federal, state, any industry-specific, and any local minimum wage.
Overtime and the minimum wage
California's wage protections go further than the federal weekly-overtime standard. Federal law generally requires overtime only after 40 hours in a workweek. California also requires daily overtime: time-and-a-half after 8 hours in a day (and after 40 in a week), double time after 12 hours in a day, and premium pay on the seventh consecutive workday. All of that overtime is calculated on the employee's regular rate, which must itself be at least the applicable minimum wage. This is one more area where California workers receive substantially more than the FLSA floor.
How to enforce your rights
If you are paid less than the minimum wage you are owed, you generally have options:
File a wage claim with the California Labor Commissioner's Office (the Division of Labor Standards Enforcement, part of the Department of Industrial Relations). You can recover unpaid wages, and the law allows liquidated damages equal to the unpaid minimum-wage amount in many cases, plus interest.
Keep records. Save pay stubs, schedules, and your own log of hours worked. California requires itemized wage statements, which help prove underpayment.
Act promptly. Wage claims are subject to time limits (commonly three years for many wage violations, and up to four under California's unfair-competition law). Filing sooner protects more of what you are owed.
Retaliation is illegal. It is unlawful for an employer to fire, discipline, or punish you for asserting your wage rights or filing a claim.
Where to confirm the current rate
The authoritative source is the California Department of Industrial Relations (DIR) and its Labor Commissioner's Office, which publishes the current statewide minimum wage, the fast-food and health-care rates, and guidance on tips and overtime. For local minimum wages, check the official website of the specific city or county where you work. Because California indexes its minimum wage to inflation and many localities adjust mid-year, the single most reliable habit is to verify the exact current figure with these official sources rather than relying on a number you saw months ago.
Official California Sources
This page is based on California employment law. Rules and figures change — verify the current details directly with the official California sources below. This is general legal information, not legal advice.
Federal law and local ordinances may also apply. Federal laws like the Fair Labor Standards Act set a national floor, and your city or county may add protections (such as a higher local minimum wage or paid sick leave). Check both alongside California state law.
Frequently asked questions
Can my employer in California count my tips toward the minimum wage?
No. California does not allow a tip credit. Your employer must pay you at least the full state or local minimum wage in direct wages for every hour, and your tips are yours on top of that. Tips are the employee's property under Labor Code section 351.
What is California's minimum wage right now?
It was $16.50 per hour as of January 1, 2025, for all employers, and it rises each January 1 with inflation, so the 2026 figure may be higher. Confirm the current rate on the California Department of Industrial Relations minimum-wage page, and check whether a higher city, county, or industry rate applies.
Do fast-food and health-care workers have a different minimum wage in California?
Yes. Most fast-food workers at large national chains earn a $20.00 per hour sector minimum (effective April 1, 2024), and covered health-care workers are on a separate phased-in schedule that varies by facility type under SB 525. Verify the current figure with the Labor Commissioner.
What if my city has a higher minimum wage than the state?
You are entitled to the highest applicable rate. Many California cities and counties - including Los Angeles, San Francisco, and others - set local minimums above the state rate, and these often change on July 1. Your employer must pay the higher local figure.
What can I do if I'm paid less than minimum wage in California?
File a wage claim with the California Labor Commissioner's Office (part of the Department of Industrial Relations). You can recover unpaid wages plus, in many cases, liquidated damages and interest. Retaliation for filing is illegal, and most wage claims must be filed within three years.
This article is general legal information, not legal advice, and may not reflect the most current law or the law in your jurisdiction. Laws vary by state and change over time. For advice about your specific situation, consult a licensed attorney.
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