Business Law, employment law, Legal

Minimum Wage in California

State Minimum Wage Requirements

The state minimum wage will reach $15 per hour in 2022. The schedule of increases depends on the size of your business. Large businesses with 26 or more employees will reach $15 per hour in 2022. Small businesses with 25 or fewer employees will have until 2023 to reach the $15 per hour rate.

Dates
Employers With 26 or More Employees
Employers With 25 or Fewer Employees

1/1/18

$11/hour

$10.50/hour

1/1/19

$12/hour

$11/hour

1/1/20

$13/hour

$12/hour

1/1/21

$14/hour

$13/hour

1/1/22

$15/hour

$14/hour

1/1/23

$15/hour*

$15/hour*

 

*Once the minimum wage reaches $15 per hour for all businesses, wages could then be increased each year up to 3.5 percent (rounded to the nearest 10 cents) for inflation as measured by the national Consumer Price Index.

Until the minimum wage reaches $15 per hour, the governor has the authority to suspend increases based on current economic conditions. These “offramps” are discretionary and would come into play only if there are declining state revenues from sales tax; there is a decline in the labor market; or there is a budget deficit (this offramp is permitted to occur only twice).

Employers should be mindful of the effect of future state minimum wage increase on exempt/nonexempt classifications and ensure that employees meet the salary basis test for the particular exemption claimed.

In 2018, employers with 26 or more employees must pay all work that qualifies for overtime at $16.50 per hour (time and one-half) or $22.00 per hour (double-time).

Employers with 25 or fewer employees must pay $15.75 per hour (time and one-half) or $21 per hour (double-time).

Some cities and counties in California have adopted their own local minimum wage rates that are separate from the state rate. This is part of a growing trend. Eligibility rules may vary from city to city. If a local ordinance provides for a higher minimum wage rate than the current state rate, the local rate must be paid.

Effective July 1, 2018, the minimum wage for Los Angeles is $12 per hour for employers with 25 or fewer employees working in the City. Future increases are as follows:

Effective Date
City of Los Angeles Minimum Wage (Per Hour)

7/1/2019

$13.25

7/1/2020

$14.25

7/1/2021

$15

7/1/2022

Increases tied to the Regional Consumer Price Index

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