Workers earning California's minimum wage will see $17.40 an hour starting Jan. 1, 2027, up 50 cents from the $16.90 in effect now. Gov. Gavin Newsom announced the new rate on Friday.
No legislative action was needed. California indexes its minimum wage to inflation, and the annual adjustment happens on its own each January. The state announces the coming year's figure in the middle of the prior year.
The new rate will be the highest statewide minimum in the United States. It is nearly two and a half times the federal minimum of $7.25 an hour, a figure unchanged since 2009.
Which rate actually applies
The statewide number is the starting point, and for many Santa Clara County workers it is not the operative one.
Several Bay Area cities have adopted local minimum wage ordinances that run above the state floor, and those local rates apply to work performed inside city limits. Because the obligation follows the worksite rather than the employer's address, someone living in Saratoga and commuting to a neighboring city may be entitled to that city's higher rate.
Industry schedules add a second layer. California sets distinct minimums for fast food workers at larger chains and for health care workers, both above the general rate. Employees in those categories follow their own schedule.
For small employers
The state no longer distinguishes between large and small businesses. A separate, lower rate for employers with 25 or fewer workers was phased out, so a small Saratoga business is on the same schedule as a national chain.