Under the Labor Code, each year the State of California must determine and certify whether an adjustment for inflation is applied to the state’s minimum wage. In 2022, when the rate of inflation exceeded 7 percent, the state minimum wage was increased to $15.50. This year, California has decided that the minimum wage increase will include an inflation adjustment of 3.5 percent for all employees. This means effective January 1, 2024, California’s minimum wage will increase to $16.00 per hour for all employers, regardless of size.

This minimum wage increase will affect not only hourly employees but will impact some exempt employees in California who are required to receive a salary of at least twice the state minimum wage.

However, employers should be aware that numerous cities across California have separate minimum wages, which are typically higher than the state minimum wage.