02-08-2025
- Business
- San Francisco Chronicle
The minimum wage is set to rise in California on Jan. 1
The state minimum wage will increase again in the new year.
Under California labor law, the state's director of finance has to calculate annually how much the minimum wage will go up in the following year. The increase is determined by whichever number is lesser: 3.5%; or the rate of change for the U.S. Bureau of Labor Statistics non-seasonally adjusted U.S. Consumer Price Index for Urban Wage Earners and Clerical Workers (U.S. CPI-W).
This year, the lesser number is 2.49% — the average U.S. CPI-W for the 12-month period from July 1, 2024 to June 30, 2025 compared to the same period in the prior year.
On Jan. 1, 2026, the minimum wage for all employers in California will be $16.90.
That will put California at the second-highest minimum wage in the country, after the District of Columbia, where it's $17.95 an hour. In Washington state, the minimum wage is $16.66 per hour; $16.50 in parts of New York state; and $16.35 an hour in Connecticut.
Health care and fast-food workers in California receive a higher minimum wage than the state minimum. Certain health care workers qualify for a $24-an-hour minimum wage as of the beginning of July 2025. The minimum hourly rate for fast food workers increased to $20 per hour in April 2024.
Critics said the fast food minimum wage would lead to job losses and price hikes, but a study from the Center on Wage and Employment Dynamics at UC Berkeley found that didn't happen.
A ballot proposition to increase the statewide minimum wage to $18 an hour failed in the 2024 election, with 50.7% of voters voting 'no.'
