Local minimum wage rates in several California jurisdictions will rise above the statewide rate in 2027. Employers must pay employees at least the applicable local rate for all hours worked in these jurisdictions. Below is a summary of the key changes and the practical steps employers should consider.
What changed:
| Jurisdiction | Current Rate | 2027 Rate | Increase | Effective Date |
|---|---|---|---|---|
| California (statewide) | $16.90 | $17.40 | $0.50 | Jan. 1, 2027 |
| Palo Alto | $18.70 | $19.25 | $0.55 | Jan. 1, 2027 |
| San Diego | $17.75 | $18.35 | $0.60 | Jan. 1, 2027 |
| City of San Mateo | $18.60 | $19.25 | $0.65 | Jan. 1, 2027 |
| San Mateo County (unincorporated areas) |
$17.95 | $18.58 | $0.63 | Jan. 1, 2027 |
| Burlingame | $17.86 | $18.47 | $0.61 | Jan. 1, 2027 |
| Half Moon Bay | $17.91 | $18.51 | $0.60 | Jan. 1, 2027 |
| West Hollywood (non-hotel employees) |
$20.25 | $20.94 | $0.69 | Jan. 1, 2027 |
| West Hollywood (hotel employees) |
— | $20.87 | — | July 1, 2026– June 30, 2027* |
*Hotel worker rate in West Hollywood follows a July 1 cycle instead of a calendar year cycle.
Eligible employees
Most localities apply their minimum wage to all employees who work at least two hours in a single workweek within city or county limits.
The highest applicable rate controls
Employers should pay close attention to where remote or traveling employees perform work and ensure they pay the highest applicable rate among federal, state, and local minimum wages for that location.
Certain industries also have separate state-level minimum wage requirements, which employers should review alongside local rates.
Action items for employers
- Review payroll systems. Confirm that rates for affected employees are updated by the first pay period that includes January 1, 2027, and that work locations are coded correctly.
- Update required posters and notices. Many localities require employers to display an updated local minimum wage poster or notify employees. Obtain and post current versions and distribute them electronically to remote workers where required.
- Check exempt-employee salary thresholds. Under California law, most salaried exempt employees must earn a monthly salary equal to at least two times the state minimum wage for full-time employment. Based on the $17.40 statewide rate, the 2027 threshold is $72,384 per year ($17.40 × 2 × 2,080 hours), or $6,032 per month. Adjust the salaries of any exempt employees who fall below this level.
- Review employees working in multiple jurisdictions. Identify employees who perform work in more than one city or county and ensure you track and pay their hours at the correct local rate.
- Review pay scales and compression. Increases at the bottom of the pay scale may compress differentials between entry-level employees and more senior employees or supervisors. Consider whether adjustments are warranted.
- Communicate changes. Inform affected employees and managers of the new rates and provide written notice of wage changes as required under California Labor Code section 2810.5.
- Monitor for additional local announcements. Other California localities may announce 2027 rates in the coming months. Continue to monitor city and county announcements for every location where you have employees.
Looking ahead
Most of these increases take effect January 1, 2027, except for the West Hollywood hotel worker rate, which has been in force since July 1. Employers with California operations should review payrolls, postings, and pay practices before that date to ensure compliance in every jurisdiction where employees perform work.