If your dental practice operates within Los Angeles city limits, an important payroll change is coming. Effective July 1, 2026, the City of Los Angeles minimum wage will increase from $17.87 to $18.42 per hour.
While the increase may seem small on a per-hour basis, it can have a noticeable impact on your practice’s payroll and operating budget if not planned for in advance.
How This Impacts Your Dental Practice
The Los Angeles minimum wage applies to all employees working within the city, regardless of job title or industry. This includes front desk team members, dental assistants, sterilization technicians, and any other staff members earning at or near minimum wage.
The increase of $0.55 per hour adds up over time. A full-time employee working 40 hours per week will cost approximately $1,144 more per year at the higher rate. Practices with multiple affected employees may see several thousand dollars in additional labor costs during the second half of 2026 alone.
Because payroll is one of the largest expenses in a dental practice, even incremental wage increases should be intentionally built into your budget.
Understanding Los Angeles’ Annual Wage Adjustments
Los Angeles adjusts its minimum wage once per year, following a consistent and predictable schedule. Each February 1, the city announces the updated minimum wage that will take effect on July 1 of the same year.
This timeline provides employers with roughly six months to prepare, allowing practice owners to adjust payroll projections, update systems, and plan cash flow before the increase becomes effective.
Since these adjustments occur annually, incorporating expected wage increases into long-term financial planning is essential for maintaining profitability and stability.
Paid Sick Leave Requirements to Review
In addition to minimum wage compliance, Los Angeles requires employers to provide 48 hours of paid sick leave per year to employees working within the city.
Practices may satisfy this requirement using one of two compliant methods:
- Front-loaded method: Employees receive the full 48 hours at the start of each 12-month period. This approach simplifies tracking but creates an upfront cost.
- Accrual method: Employees earn 1 hour of paid sick leave for every 30 hours worked, allowing the cost to be spread throughout the year.
Both methods are compliant when administered correctly. Your chosen approach should be clearly documented in your employee handbook and accurately tracked through payroll.
Steps to Take Before July 1, 2026
To prepare your practice, we recommend taking the following steps well in advance of the increase:
- Review current wages to identify employees earning minimum wage or close to it.
- Calculate the total impact by factoring in the number of affected employees and their average hours worked.
- Update payroll software to ensure the new rate is automatically applied on July 1.
- Communicate proactively with your team so wage adjustments come directly from leadership.
- Confirm paid sick leave compliance and verify that accruals or front-loaded balances are being tracked correctly.
Planning for the Future
Because Los Angeles minimum wage increases occur every year, proactive planning is key. Including expected wage adjustments in your multi-year financial projections can help prevent budget surprises and support better decision-making related to staffing, fees, and practice growth.
Setting a recurring reminder each February to review the upcoming July wage announcement is a simple habit that can keep your practice ahead of compliance requirements.
How Dental CPA Can Help
At Dental CPA, we help dental practices stay compliant with wage laws while managing payroll costs strategically. If you’d like help understanding how this increase affects your specific practice or want guidance on long-term labor cost planning, our team is here to help.