Minimum Wage And Salary Increase. Insurance Compensation And Profit


Officials in California have announced that there will be a statewide increase in minimum wage for all employers, regardless of size, effective January 1, 2026. The new rate will be $16.90/hour, as required by the state's annual inflation-based adjustment process.

According to JDSUPRA reporting, the mandate will not only change hourly pay, it will impact exempt employee classifications, wage-related premiums, sick leave accruals, and even wage statement compliance. It's also important to note that this minimum wage increase will operate alongside local minimum wage ordinances and industry-specific rules that may impose higher or different standards.

JDSUPRA outlines five things employers need to know:
1. The minimum wage hike applies to all private employers across the state, regardless of size.
2. Exempt employee salary thresholds will increase, as they are tied to minimum wage.
3. Inside sales exemptions, tool reimbursements, and certain piece-rate compensation arrangements should be re-evaluated.
4. Employers should look at pay calculations for split shifts, reporting time, and breaks.
5. Local ordinances may still impose higher minimum wage rates. Employers must do their research.

For additional details on each of these points, as well as action items employers can take, click here for the full article.