California's minimum wage rate increased on January 1, 2019, to $12.00 per hour for businesses employing 26 or more employees and $11.00 per hour for those with 25 or fewer employees. The increase is a result of California Senate Bill 3, which was signed into law in 2016. The law will increase California’s minimum wage to $15 per hour by 2023. Thereafter, the minimum wage will change based on cost-of-living increases.

California’s minimum annual salary for exempt employees of large businesses increased to $49,920 from $45,760. The minimum salary for exempt small business employees increased to $45,760 from $43,680. This is because the state’s minimum salary for exempt employees is tied to the state minimum wage. These minimum salary increases went into effect on January 1, 2019.

Additionally, California employers must comply with 25 city and county minimum wage ordinances. In nearly all of these jurisdictions, the minimum wage will increase for 2019. In 13 cities, the minimum wage increased on January 1, 2019, and in the remaining jurisdictions, the minimum wage rate will increase in July of 2019.

All of the 2019 local minimum wages are higher than the California state minimum wage. Nine cities reach the $15 rate this year, ahead of the California’s statewide increase: Cupertino, El Cerrito, Los Altos, Milpitas, Palo Alto, Richmond, San Jose, San Mateo, and Santa Clara. Five cities will exceed the $15 mark in 2019: Berkeley, Emeryville, Mountain View, San Francisco, and Sunnyvale.

Increases in the local minimum wage do not affect the statewide minimum exempt salary level referenced above.

The chart below summarizes the increases scheduled for 2019.