California Employers Should Prepare For Upcoming Minimum Wage Changes

CDF Labor Law LLP

As California employers get ready for the slew of new employment regulations coming their way in 2023 (stay tuned for CDF’s annual employment update webinar in November 2022), CDF reminds employers that one definite change is California’s minimum wage increase.

As we previously reported the minimum wage for all California employers, regardless of size, is $15.50/hour, effective January 1, 2023. This increase also affects the minimum salary requirement for exempt employees to $64,480 annually ($5,373.33 monthly) as of January 1, 2023. Be sure to review the salaries for employees you currently classify as exempt if they are close to the new annual required amount.

Employers should also keep in mind that many cities have higher minimum wage requirements already in place. For example, in Northern California, San Francisco’s current minimum wage is $16.99/hour, San Jose’s is $16.20/hour and Mountain View is $17.10/hour. Further examples in Southern California are in Los Angeles, which is $16.04/hour (employees who work for hotels with 60 or more rooms are entitled to $18.86/hour) and West Hollywood, which will increase from $16 to $17 effective January 1, 2023 for small businesses (those with less than 50 employees), large businesses (those with 50 or more employees) will increase to $17.50/hour (up from the current rate of $16.50/hour), and hotel employees will remain at the current rate of $18.35/hour, until July 1, 2023, when all of these categories increase to $18.86/hour. While these are just some examples of different rates based on location and industry, it is important that California employers check the cities and industries that affect their specific businesses. Indeed, this area continues to evolve, as Governor Newsom just signed new legislation that will affect, among other things, wages for fast food workers. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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