Every January, California employers get a stack of "new laws" round-ups. Most are rewrites of each other, and some repeat errors all the way down the chain. This post is deliberately narrower: it covers the January 1, 2026 changes we verified directly against the agency's own page or the current text of the Labor Code — nothing relayed from a round-up.
Quick facts
| Change | Detail | Where we verified it |
|---|---|---|
| Minimum wage | $16.90 per hour for all employers, effective January 1, 2026 | DIR minimum wage FAQ (agency page) |
| SDI withholding | 1.3 percent for 2026, up from 1.2 percent in 2025 — with no taxable wage cap | EDD rates and withholding page (agency page) |
| Personnel records | Education and training records are now expressly part of the personnel file an employee may inspect and copy, and employers who keep training records must include specific fields | Labor Code § 1198.5, current text (edition updated January 1, 2026) |
The $16.90 minimum wage
The Department of Industrial Relations states it plainly: "Effective January 1, 2026, the minimum wage is $16.90 per hour for all employers, not otherwise covered by a higher minimum wage specific to an industry or a locality."
Three practical notes:
- The statewide rate is a floor. Dozens of California cities and counties set higher local rates, many of which adjust on July 1 rather than January 1. If you operate in Los Angeles, San Francisco, San Diego, or most Bay Area cities, the local rate — not $16.90 — is likely your number.
- Industry-specific minimums (fast food, certain health care facilities) run on their own schedules and sit above the general rate.
- The exempt-salary threshold moves with the state minimum wage: the general executive/administrative/professional exemption requires a monthly salary of at least two times the state minimum wage for full-time employment. At $16.90, that is $70,304 per year (2 × $16.90 × 40 hours × 52 weeks). Check every salaried-exempt employee against the new floor, not just hourly staff.
SDI: 1.3 percent, no cap
The EDD's rates page confirms: "The SDI withholding rate for 2026 is 1.3 percent," and — a point employers with higher earners still miss — "Effective January 1, 2024, all wages are subject to SDI contributions." The taxable wage limit is gone, so the rate increase applies to every dollar of wages, including amounts above the old cap. Payroll systems set up before 2024 sometimes still carry a wage ceiling; this is the year to confirm yours does not.
Training records join the personnel file
The current text of Labor Code section 1198.5 — the personnel-records inspection statute — now says every current and former employee has the right to inspect and copy "the personnel records that the employer maintains relating to the employee's performance, including education or training records."
And it goes further. If you maintain education or training records, the statute specifies what they must include, among them: the name of the training provider, the duration and date of the training, and "the core competencies of a training, including skills in equipment or software."
Why this matters beyond recordkeeping: under the reformed PAGA statute, an employer's penalty exposure can be capped where it "has taken all reasonable steps" toward compliance — and the statute's own illustrative list includes having "trained supervisors on applicable labor code and wage order compliance." A training log that meets the section 1198.5 field requirements is the evidence that the training happened. We cover the full reasonable-steps framework in our PAGA post.
What this means for your handbook
- Update any stated wage figures and the exempt-salary references.
- If your handbook describes personnel-file access, make sure it does not exclude training records.
- If you run a training program, set the log format now: provider, date, duration, competencies covered.
HandbookIQ's California library carries these updates; a free handbook audit will flag a handbook that still states 2025 figures.
Everything above was checked against the DIR and EDD pages and the current Labor Code text on the verification date in this article's header. Local ordinances and industry-specific schedules change on their own cycles — confirm your locality before relying on the statewide figure.