The minimum wage goes up to $20 an hour, up from the $16 an hour for most other workers.
The increase is tied to legislation passed last year and signed by Gov. Gavin Newsom.
There are already reports of some businesses cutting their workforces or raising prices in anticipation of the change.
"The consumer is going to end up paying for it," said Shahan Derian, owner of Lee's Hoagie House in Pasadena. "That's the saddest part."
Lee's Hoagie House isn't covered under the new law but Derian says he'll have to raise wages anyway or his workers will leave for the new higher-paying jobs.
Pizza Hut has already announced plans to lay off about 1,200 workers in California because of the increase.