On July 1, 2026, minimum wage increases went into effect in certain cities and counties in California. In the City of Los Angeles, the minimum wage increased from $17.87/hour to $18.42/hour. For employees at Los Angeles hotels with 60 or more guest rooms, the minimum wage increased to $25.00/hour¹, plus $4.25/hour for the provision of health care benefits and, if no health benefits are provided, the $4.25 must be provided as an additional hourly wage.

The new minimum wage for employees in unincorporated areas of Los Angeles County is now $18.47/hour (up from $17.81/hour). Santa Monica’s rate, as set by its own ordinance, also increased to $18.47/hour. Although Malibu was subject to a suspension of its scheduled minimum wage increase during fiscal year 2025–2026 to support businesses impacted by the Palisades Fire, the suspension has ended and Malibu’s minimum wage increased to $17.91/hour.

Below is a summary of the local minimum wage rate increases that went into effect on July 1, 2026.

City	Hourly Rate
Alameda	$17.76
Berkeley	$19.61
Emeryville	$20.34
Fremont	$18.05
Long Beach	Hourly rate payable to airport and concessionaire workers: $26.50. For hotel employees at hotels with 100 or more guest rooms: $26.50. Otherwise, the city continues to follow the state minimum wage rate ($16.90/hour).
City of Los Angeles	$18.42 For hotel employees at hotels with 60 or more guest rooms: $25.00/hour (plus a $4.25/hour health benefit supplement if equivalent benefits are not provided). (To determine if a hotel falls within the city limits, go to the City of Los Angeles Neighborhood Info website.)
County of Los Angeles (unincorporated areas)	$18.47
Malibu	$17.91
Milpitas	$18.50
Pasadena	$18.57
City and County of San Francisco	$19.61
Santa Monica	$18.47 For all hotel employees: $25.00/hour.

In cities and counties that require a higher minimum wage than the state minimum wage, including the ones listed above, employers are bound by the higher local minimum wage. Employers in these cities should update their minimum wage postings in the workplace to reflect local increases.

You can find a complete inventory of minimum wage ordinances via the UC Berkeley Labor Center.

Employers with employees in California localities that have not set their own minimum wage must continue to comply with the State of California’s minimum wage requirement, which is currently $16.90/hour for most employers. Employers should note that some industries are subject to a higher minimum wage rate. For covered fast food workers, the minimum wage remains $20.00/hour. For certain healthcare workers, the minimum wage increased to $25.00/hour on July 1, 2026. (Rates for healthcare workers vary by facility classification, so employers should verify their specific category under SB 525.)

Employers should remember that an increase in the local minimum wage does not affect the minimum wage that is used for the salary-basis test for California’s executive, administrative, and professional overtime exemption categories. As a reminder, for these exemptions to apply, California employers must pay these employees a salary that is at least twice the state minimum wage (equal to $1,352.00/week, $5,858.67/month, or $70,304.00 annually in 2026), in addition to meeting the other requirements for those exempt classifications.

Employers with out-of-state employees should note that federal regulations require employees to be paid a minimum salary of $35,568.00, or $684.00/week, to qualify as exempt under the executive, administrative, or professional employee exemptions. Employees outside of California who are exempt under the federal Highly Compensated Employees rule must earn $107,432.00/year, including at least $684.00/week paid on a salary or fee basis.

¹Pursuant to Santa Monica Municipal Code Section 4.63.015(b)(2), the hourly minimum wage for hotel workers in the City of Santa Monica shall match the hourly wage set for hotel workers in the City of Los Angeles. Please note, the City of Los Angeles has introduced a health benefit requirement effective July 1, 2026; however, the City of Santa Monica does not impose a health benefit requirement.

Marc M. Stern

Federal Income Taxation of Estates Trusts and Beneficiaries

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