The State of California’s minimum wage is set to increase to $16 per hour (an increase of $0.50 from the current minimum wage of $15.50), on January 1, 2024. The state minimum wage will apply to all employers, regardless of their size.
On July 31, 2023, the California Department of Finance Director, Joe Stephenshaw, sent a letter to Governor Gavin Newsom that economic conditions support a statewide minimum wage increase. Under Labor Code Sec. 1182.12, the Director of Finance must annually determine and certify to the Governor whether an adjustment for inflation is applied to the state’s minimum wage after the minimum wage reaches fifteen dollars ($15) per hour. As of January 1, 2023, the State minimum wage for all employers, regardless of size, increased to $15 per hour.
The increase to the State minimum wage will also affect the minimum salary requirements for full-time exempt employees. Beginning January 1, 2024, the minimum salary for a full-time exempt employee will be $66,560 per year (currently $64,480 per year).
As a reminder, California State minimum wage is the minimum threshold for wages in the State, and generally increases on January 1st if an increase is warranted. Local jurisdictions – like some cities, counties and metropolitan areas – may have higher minimums. For example, the minimum wage in the City of Los Angeles increased last month to $16.78 per hour.
California employers should check with their local counties or cities to determine the appropriate minimum wage for employees. Employers with any questions regarding wage and hour compliance should contact employment counsel immediately.