If you run a restaurant, shop, salon, clinic, warehouse or office in the Tri-City area, the Union City minimum wage 2027 change is already a payroll project. California’s statewide minimum wage goes from $16.90 to $17.40 per hour on January 1, 2027, and that rate is the legal floor for most work performed in Union City. This guide skips the news recap and focuses on what employers should actually do: confirm which rate applies, update payroll, check salaried staff, plan the cost and keep the records clean.
Accountico Inc. is a CPA firm in Union City, CA that supports employers in Fremont, Newark, Hayward, San Leandro, Castro Valley and across the Bay Area. This article is general information based on official sources checked on October 11, 2026. It is not legal or payroll advice for your specific business, and local rules can change.
What is certified for 2027: the California rate
Under Labor Code section 1182.12, the Director of Finance must calculate the adjusted minimum wage each year. In a letter dated July 31, 2026, the Department of Finance certified that the average U.S. CPI-W rose 2.99 percent, so the statewide minimum wage will increase to $17.40 per hour for all employers on January 1, 2027. The Labor Commissioner’s Office, part of the Department of Industrial Relations (DIR), repeated the date in its August 13, 2026 news release.
That is a $0.50 per hour increase over the current $16.90 rate. For most hourly employees in Union City and Newark, it is the only rate change on January 1. For employers in cities with their own ordinance, the local rate may be higher, and the higher rate controls. The DIR minimum wage FAQ explains that when state and local rules conflict, the employer must follow the standard that is more beneficial to the employee.
Which minimum wage applies in Union City and nearby cities
Minimum wage in California depends on where the work is performed, not where the business has its mailing address. Here is what we could verify from official sources for the cities Accountico clients ask about most:
- Union City: the UC Berkeley Labor Center inventory of local minimum wage ordinances, which DIR refers employers to, does not list Union City. We did not find a Union City ordinance, so the state rate of $17.40 is the floor on January 1, 2027. The Union City minimum wage 2027 answer for most employers is therefore the same as the statewide rate.
- Newark: not listed in the same inventory, so the state rate applies.
- Castro Valley: Castro Valley is unincorporated Alameda County. The inventory lists no Alameda County ordinance for unincorporated areas, so the state rate applies. (The inventory does list the City of Alameda, which is a separate city.)
- San Leandro: the city has an older ordinance, but its own minimum wage page states that as of January 1, 2023 the hourly minimum wage is determined by the State of California. The state rate of $17.40 applies in 2027.
- Hayward: the City of Hayward reports two rates starting January 1, 2027: $18.39 per hour for employers with 26 or more full-time or part-time employees (up from $17.79 in 2026), and $17.40 for employers with 25 or fewer employees. Headcount includes employees who work outside Hayward.
- Fremont: the City of Fremont rate is $18.05 per hour since July 1, 2026. Fremont adjusts on July 1, and the schedule shows the 2027 rate as the 2026 wage plus an inflation adjustment, so there is no January 1 change in Fremont. The city’s ordinance exempts employees of nonprofit corporations.
We could not find a statement on the City of Union City or Newark websites that confirms these absences, so the safest step is a quick call to the city if your situation is unusual. If you work in several cities, our Hayward year-end payroll checklist and Fremont year-end tax checklist cover the other filings that land at the same time.
Salary floor for overtime-exempt employees
The minimum wage change reaches beyond hourly staff. DIR explains that an employee must earn at least twice the state minimum wage for full-time work to meet the salary part of the overtime exemption. Using the 2027 rate: $17.40 x 2 x 40 hours x 52 weeks = $72,384 per year. At the 2026 rate, the same formula gives $70,304. Duties must also qualify, so a high salary alone does not make someone exempt.
Review every salaried employee before January 1, especially assistant managers, office managers and administrative staff in small Union City businesses. If a salary falls below $72,384, you generally either raise it or treat the role as non-exempt, which means tracking hours and paying overtime. That decision affects payroll cost and scheduling, so it deserves a deliberate plan rather than a January surprise.
Two higher state minimums also exist for certain industries. DIR’s minimum wage page lists $20.00 per hour for covered fast food restaurant employees since April 1, 2024 and a higher minimum wage for certain health care workers since October 16, 2024. If your business falls into either category, use the industry rules instead of the general rate.
Payroll setup checklist before the first January 2027 paycheck
A rollout is easier when it is planned in advance and harder to fix after a paycheck goes out wrong. Use this checklist with your payroll service or in-house payroll software:
- List every employee by work location. Note the city where each person actually works, and flag anyone who splits time between Union City, Hayward, Fremont or other cities.
- Find everyone below $17.40. Run an hourly-rate report and sort ascending. Include part-time, seasonal and holiday hires. Anyone hired in November or December at $16.90 needs a January 1 rate change.
- Schedule the rate change with an effective date of January 1, 2027. Wages for hours worked on or after that date must be at least the new rate. If a pay period includes both December and January hours, confirm your system pays each hour at the correct rate rather than applying one rate to the whole period.
- Check Hayward headcount. If you have Hayward employees and are close to 26 total employees, count all full-time and part-time employees, including those who work outside Hayward.
- Review salaried employees against $72,384. Document the decision for each exempt role.
- Confirm pay stubs show the correct rates. DIR’s release reminds employers they must list employees’ wage rates on pay stubs.
- Check tip handling. DIR’s minimum wage FAQ states that employers may not use an employee’s tips as a credit toward the minimum wage. Tipped employees in restaurants and salons must still reach the full rate from the employer’s wages.
- Test one sample paycheck. Before the first January payroll, run a test employee at the new rate and verify gross pay, overtime, sick leave and tax withholding.
New to payroll or hiring your first employee? Review company formation and EIN basics first, then read our post on costly payroll errors that hurt small businesses.
Paid sick leave, postings and employee notices
The rate change is a good time to review the paperwork that sits next to payroll. According to DIR’s paid sick leave FAQ, California generally requires employers to provide at least 40 hours or five days of paid sick leave per year. Employers using an accrual plan must generally let employees earn at least one hour for every 30 hours worked, may cap use at 40 hours or five days per year, and may cap accrued balances at 80 hours or ten days. Employers must show available sick leave on the pay stub or a document issued with the paycheck and must keep records of leave earned and used for three years.
Two points matter for the minimum wage update. First, non-exempt employees are paid their regular non-overtime rate when they use sick leave, so a higher base rate raises the dollar cost of each sick hour. Second, if a local ordinance gives more sick leave than state law, the employer must provide the more generous benefit, so check local rules for each city where you have staff.
DIR’s workplace postings page also lists the notices to review: the state minimum wage order, the applicable Industrial Welfare Commission wage order, the paid sick leave poster and the payday notice. Download current versions from DIR when the updated minimum wage poster becomes available. DIR also lists a California Workplace Know Your Rights notice that employers must provide to employees on or before February 1 each year, which is easy to miss in a busy January. In Hayward and Fremont, employers must also post the city’s wage bulletin in the required languages (the top three languages in Hayward and the top five in Fremont).
Budgeting for the increase: a simple cost illustration
Owners often ask for the “real” cost of a $0.50 per hour raise. Here is a simple illustration using verified rates and a clearly labeled assumption. It is arithmetic, not a forecast for your business.
- Assumption: a Union City retailer has 8 full-time hourly employees currently paid $16.90, each working 2,080 hours in 2027.
- Base wage increase: $17.40 minus $16.90 is $0.50 per hour, or $1,040 per employee per year, or $8,320 for all eight.
- Employer payroll tax on the increase: the IRS lists the employer rate at 6.2 percent for Social Security and 1.45 percent for Medicare (IRS Topic 751), or 7.65 percent combined. On $8,320, that is about $636.
- Illustrative total: about $8,956 for the year before any workers’ compensation premium change, overtime effects or raises you give to employees who earn slightly more than the minimum.
For a Hayward employer with 26 or more employees, the same math uses the $0.60 per hour increase from $17.79 to $18.39, which is $1,248 per full-time employee per year before employer payroll taxes. Employer Unemployment Insurance and Employment Training Tax apply to the first $7,000 of each employee’s wages in 2026 according to EDD, so full-year employees are usually already above that wage base. Your 2027 rates will be on the DE 2088 notice that EDD mails with a December 31 date.
The bigger planning issue is often pay compression. When the lowest rate rises, workers who were earning slightly more may expect a matching adjustment. Build that decision into the budget now, then use your bookkeeping reports to compare labor cost as a percent of revenue before and after the change. If pricing changes are on the table, tell your accountant early so cash flow and tax planning can reflect it. Our guide on bookkeeping cost for a small business in California can help you decide what level of support fits your budget.
Bookkeeping steps that make the change audit-ready
Minimum wage claims are usually won or lost on records. A few habits protect an employer and make year-end reporting easier:
- Keep a rate-change log. Record each employee’s old rate, new rate and effective date, with the approval date.
- Tie payroll to the general ledger. Reconcile payroll registers to wages expense, payroll tax liabilities and sick leave balances every month, as part of regular bookkeeping.
- Track accrued paid sick leave. Balances should match what appears on pay stubs.
- Store time records and notices. IRS Publication 15 says to keep employment tax records at least four years, and the Hayward and Fremont ordinances call for four years of payroll records.
- Prepare for year-end forms. Higher wages flow into Forms W-2, California payroll reports and your business tax return, so mid-year corrections are cheaper than January corrections.
Timeline: what to do between now and January 1
- Now through October: confirm work locations, run the below-$17.40 report and decide how to handle salaried roles near the $72,384 line.
- November: set holiday hires at the correct rate if their pay will continue past January 1, and price the increase into your 2027 budget.
- December: schedule the January 1 rate change, check posters and notices, and verify Hayward headcount if applicable. Watch for your DE 2088 rate notice from EDD.
- First January payroll: review a sample paycheck, confirm pay stubs and file the change documentation.
- July 1, 2027: if you have Fremont employees, plan for the next Fremont adjustment.
FAQ: Union City minimum wage 2027
What is the Union City minimum wage in 2027?
Union City employers must pay at least California’s statewide minimum wage, which rises from $16.90 to $17.40 per hour on January 1, 2027. The California Department of Finance certified the increase on July 31, 2026, and the Department of Industrial Relations has confirmed it. We did not find a separate Union City minimum wage ordinance in the UC Berkeley Labor Center inventory of local ordinances, so the state rate is the floor for work performed in the city. Confirm with the City of Union City if your business has unusual facts.
Do Newark, San Leandro and Castro Valley use the state minimum wage too?
Based on the UC Berkeley Labor Center inventory that the Department of Industrial Relations points employers to, Newark has no local minimum wage ordinance, and neither does unincorporated Alameda County, which includes Castro Valley. San Leandro has an older ordinance, but the city states that since January 1, 2023 its minimum wage is determined by the State of California. For all three, the 2027 floor is $17.40 per hour unless a higher industry minimum applies, such as the state fast food or health care worker minimums.
Which nearby cities pay more than the state minimum wage?
Hayward and Fremont have local ordinances. Hayward employers with 26 or more employees must pay $18.39 per hour starting January 1, 2027, while Hayward employers with 25 or fewer employees follow the state rate of $17.40. Fremont’s rate is $18.05 per hour since July 1, 2026, and the next scheduled Fremont change is July 1, 2027. The rule is based on where the work is performed, so an employee who works shifts in more than one city may be covered by more than one rate.
How does the 2027 increase affect salaried employees who are exempt from overtime?
California requires an exempt employee to earn at least twice the state minimum wage for full-time work, in addition to meeting the duties test. The Department of Industrial Relations calculates the 2027 threshold as $17.40 x 2 x 40 hours x 52 weeks = $72,384 per year. A salaried manager paid less than that on January 1, 2027 would not meet the salary test, so owners should review salaried roles before the new year.
Does the minimum wage increase change paid sick leave?
The paid sick leave rules are separate, but the cost moves with wages. California generally requires employers to provide at least 40 hours or five days of paid sick leave per year, and non-exempt employees are paid their regular non-overtime rate when they use it. When the base hourly rate goes up, the dollar value of every sick hour goes up too, so employers should update accrued balances, pay stub reporting and cost forecasts for the new rates.
How long should I keep payroll records after a minimum wage change?
The IRS says to keep employment tax records for at least four years, Hayward and Fremont ordinances require four years of payroll records, and the Department of Industrial Relations says paid sick leave records must be kept for three years. Keep the rate change date, the old and new hourly rates, time records and pay stubs together so you can show that every hour from January 1, 2027 was paid at the correct rate.
Get your Union City minimum wage 2027 payroll plan in place
A Union City minimum wage 2027 plan works best when payroll setup, salaried-employee review, sick leave tracking and cash flow are handled together. Accountico Inc. helps employers across Union City, Fremont, Newark, Hayward, San Leandro, Castro Valley and the Bay Area with payroll services, bookkeeping and tax preparation so wage changes are recorded correctly from the first January paycheck.
Book a free 30-minute consultation, call (510) 400-9341, or contact our Union City team at Accountico Inc, 33476 Alvarado Niles Rd, Ste A007, Union City, CA 94587. Office hours are Monday to Friday, 9:00 AM to 6:00 PM Pacific.
This article is general information based on California Department of Finance and Department of Industrial Relations materials, city of Hayward, Fremont and San Leandro pages, the UC Berkeley Labor Center inventory, IRS Topic 751 and EDD rate information available as of October 11, 2026. It is not legal, payroll or tax advice for your specific business. Minimum wage rules, local ordinances and industry minimums can change. Confirm current requirements before acting.
