The wage floor rose to $16.90 — and quietly raised the bar for “exempt”

The headline is the hourly minimum: $16.90 across California as of January 1, 2026. The number that trips up employers is the one attached to it — the salary an employee must earn to remain exempt from overtime.

California ties the exempt-salary floor to the minimum wage: an exempt executive, administrative, or professional employee must earn at least twice the state minimum for full-time work. For 2026 that is $70,304 a year. Pay a “salaried” employee less than that, and they are almost certainly entitled to overtime no matter what their title says.

What changed

Both figures indexed upward. If you have salaried staff who were near the previous line, some of them may now sit below $70,304 — which reclassifies them, in practice, as non-exempt.

Who’s affected

Every employer with California workers. The exposure concentrates in small teams with a few salaried supervisors or coordinators whose pay hovers near the threshold, and in any city with its own higher local minimum.

What to do now

Pull a list of every exempt employee and their annualized salary. Flag anyone below $70,304 and decide, deliberately, whether to raise pay to preserve the exemption or reclassify to non-exempt and track hours. Check the local minimum wage for each work location — city ordinances can exceed the state floor.

How The HR Meeting helps

We run the exemption math for your roster, model the cost of “raise vs. reclassify,” and update job descriptions and timekeeping so the classification actually holds up.