At a glance
- Minimum wage: $16.90 an hour, rising to $17.40 on January 1, 2027.
- Tipped cash wage: $16.90 (no tip credit).
- Overtime: daily and weekly rules apply.
- Final paycheck if fired: immediately, on the last day of work.
- Paid sick leave: Yes. Paid family leave program: Yes.
What California employers need to know
California has the most employee-protective wage and hour rules in the country, and the most expensive mistakes. Daily overtime, double time, meal and rest break premiums, waiting time penalties for late final pay, and the Private Attorneys General Act, which lets employees sue on behalf of the state, all add up quickly. The state minimum wage rises to $17.40 on January 1, 2027, but more than 30 cities and counties set higher local rates, and fast food and health care workers have their own industry minimums.
California minimum wage
| Minimum wage | $16.90 |
|---|---|
| Tipped cash wage | $16.90 (no tip credit) |
| Next change | $17.40 on January 1, 2027 |
| Local rates | More than 30 cities and counties, including Los Angeles, San Francisco, San Jose, and San Diego, set higher local minimum wages. Large fast food chains must pay at least $20 an hour, and covered health care facilities follow a separate schedule. |
Pay the highest rate that applies where the employee works: federal, state, or local. For comparison, neighboring states pay Oregon ($15.55), Nevada ($12.00), Arizona ($15.15). See every state side by side in our minimum wage by state table, and convert between hourly and annual pay with the salary to hourly calculator.
California overtime rules
Overtime at 1.5 times the regular rate after 8 hours in a day, 40 hours in a week, and for the first 8 hours on the seventh consecutive workday. Double time after 12 hours in a day and after 8 hours on the seventh consecutive day.
Exempt salary test: Exempt employees must earn at least twice the state minimum wage for full-time work: $70,304 a year in 2026 and $72,384 in 2027.
Work out overtime owed with our overtime calculator, compare states in overtime laws by state, and check classification with our guide to exempt vs non-exempt employees.
California meal and rest break laws
Meal breaks: A 30-minute unpaid meal break for shifts over 5 hours (can be waived for shifts of 6 hours or less), and a second meal break for shifts over 10 hours. A missed or late meal break means one extra hour of pay at the regular rate.
Rest breaks: A paid 10-minute rest break for every 4 hours worked or major fraction of 4 hours. A missed rest break also triggers one extra hour of pay.
Many states have stricter break rules for minors. Compare adult rules nationwide in break laws by state, and total up shifts with the time card calculator.
California final paycheck law
| If you fire or lay off the employee | Immediately, on the last day of work. |
|---|---|
| If the employee quits | Within 72 hours, or on the last day if the employee gave at least 72 hours' notice. |
| Unused vacation or PTO | Required. Earned, unused vacation and PTO are wages and must be paid out at the final rate of pay. Use-it-or-lose-it policies aren't allowed. |
Build the deadline into your offboarding checklist. Our offboarding guide covers the full process, the PTO payout calculator works out the amount, and the final paycheck laws by state table compares every state.
California paid sick leave and family leave
Paid sick leave: Paid sick leave of at least 40 hours or 5 days a year. Employees earn at least 1 hour for every 30 hours worked, or you can front-load the full amount.
Paid family and medical leave: Paid Family Leave and State Disability Insurance, funded by employee payroll deductions. PFL pays up to 8 weeks of partial wage replacement for bonding or caring for a family member.
Federal FMLA: employers with 50 or more employees within 75 miles must also give eligible employees up to 12 weeks of unpaid, job-protected leave. Read our FMLA guide, and compare states in paid leave laws by state.
Hiring, pay transparency, and payroll setup
Pay transparency: Required for employers with 15 or more employees: pay scale in every job posting, and on request for current employees.
New hire reporting: Report each new hire within 20 days of the hire date, the federal deadline.
State income tax withholding: Yes. Register with the state tax agency before the first payroll.
State disability insurance: California requires temporary disability insurance coverage, funded at least in part through payroll.
Our pay transparency laws guide explains posting rules in more depth, and our job description templates include pay data for 50 common roles.
What trips up California employers
- Final pay is due on the last day for terminations. Late final pay costs up to 30 days of wages in penalties.
- Meal and rest break violations cost one hour of pay per day per type of break, and they add up across a workforce.
- Fast food restaurant workers at large chains have a $20 minimum, and health care workers have a separate schedule.
- The exempt salary test is tied to the minimum wage, so it rises every January.
Sources and the agency to contact
- California Department of Industrial Relations (state labor agency)
- US Department of Labor: state minimum wage laws
- US Department of Labor: minimum wages for tipped employees by state
- US Department of Labor: state meal period requirements
General information for US employers, not legal advice. Laws change and have exceptions by industry, employer size, and city. Confirm current rules with the state agency or employment counsel before you rely on them.
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<a href="https://www.hrtally.com/state-labor-laws/california/">California labor laws for employers (2026)</a> (source: HRTally)
Suggested citation: HRTally Research Team. "California labor laws for employers (2026)." HRTally, updated October 20, 2026. https://www.hrtally.com/state-labor-laws/california/
Frequently asked questions
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Written by the HRTally Research Team
Our guides are written and reviewed by people with hands-on US HR, payroll, and HR technology experience. Legal and tax facts are checked against primary sources, such as the Department of Labor, IRS, EEOC, and USCIS, and linked at the end of each guide. Vendors never review or pay for our editorial content.