In this episode of Big Blend Radio’s California Employment Law Podcast, San Diego attorney Ward Heinrichs breaks down the upcoming changes to California’s minimum wage laws, effective January 2026.
The discussion covers minimum wage increases across sectors, challenges for small businesses competing with larger employers, and significant wage hikes in the healthcare industry. Ward also explains compliance requirements for exempt employees, the consequences of wage violations, and strategies for avoiding costly mistakes. This episode is essential for both employers and employees navigating California’s evolving wage landscape.
Read Ward’s article below.
NEW EMPLOYMENT LAWS FOR 2026
(Unless state otherwise, all laws go into effect on January 1, 2026)
Minimum Wage & Salary-it’s getting more complicated: The minimum wage for all California employers will be at least $16.90 per hour. That raises the minimum salary for exempt workers to $70,304.
If a restaurant employer meets the specific legal requirements to be a fast-food employer, its fast-food employees have an even higher minimum wage. That minimum wage has not changed this year, but the basics are still worth mentioning: 1) the fast-food minimum wage is $20 per hour, and 2) the minimum salary for exempt fast-food employees is twice that minimum wage of a 40-hour workweek, or $83,200 per year (2 x $20 x 40 hours x 52 weeks).
As of June 1, 2026, dialysis centers and large healthcare systems must pay their employees at least $25 per hour, while, in contrast, other listed specialty clinics will only need to pay $22 per hour. All other healthcare employers will pay a minimum wage of $23 per hour, except for rural hospitals and those that serve large populations of Medicare and Medi-Cal patients. Those two exceptions paid at least $18 per hour in 2024 and their minimum wage requirements will gradually increase to $25 per hour by 2033.
Healthcare minimum salaries are the greater of 1) two times the state minimum wage of a 40-hour week (yearly salary of $70,304) or 2) 1.5 times the healthcare minimum wage of a 40-hour workweek. That means, if an institution must pay a healthcare minimum wage of at least $22.54 per hour, then it must also pay its exempt employers more than $70,304 per year.
A plethora of local governments have greater minimum wage requirements than the state of California. For instance, the City of San Diego will require $17.75 per hour for its minimum wage, but that rate does not effect the minimum salary requirement.
Rideshare Drivers Can Unionize: AB* 1340 gives rideshare drivers the right to unionize. Proposition 22 designated rideshare divers as independent contractors with certain rights that resembled those that employees enjoy in California, but, because they were not employees, they did not clearly have the right to unionize. Now they may, thanks to AB 1340.
Wage Judgment Collections: SB*261 allows an employee to get a civil penalty equal to three times the amount of a wage judgment when the judgment remains unpaid for more than 180 days after the appeal period ends and no appeal was filed. Additionally, an employee can now get attorney’s fees and litigation costs when enforcing a judgment. The new law also empowers public counsel, such as the attorney general, district attorneys, and city attorneys to enforce wage judgments.
The Labor Commissioner Enforcing Tip Rules: SB 648 empowers the Labor Commissioner to investigate tip rule violations and file civil lawsuits or issue citations for such violations. Labor Code section 351 prevents employers from taking employee tips or using tip credits to reduce employee wages. Now the Labor Commissioner can do something about those things. However, legal tip pooling policies are still legal.
Job Posting Wage Rates: The Equal Pay Act requires employers with 15 or more employees to include wage scales with job postings. It also requires employers of any size to provide job applicants with job specific wage scales when the applicants ask for them. In the past, some employers would include extremely broad wage scales with job postings, such as, “minimum wage to $1,000,000.” To combat that, SB 642 requires employers to provide wage scales that are good faith estimates of the hourly rate or salary ranges.
Mitigation Training Admissions: In California, qualifying employers must provide bias mitigation training. During such training, employees may admit to bias as part of an assessment or as a breakthrough, public acknowledgement after self-analysis. SB 303 declares that such good faith admissions do not constitute unlawful discrimination. The legislature wanted to prevent misuse of those statements in litigation.
*AB means California Assembly Bill, and SB means California Senate Bill.
Based in San Diego, California the Employment Law Office of Ward Heinrichs represents both employers and employees in almost all areas of labor law. He and his firm litigate cases that have been filed in many different parts of California. Keep up with him on LinkedIn: https://www.linkedin.com/in/ward-heinrichs/
