More Minimum Wage Increases Hitting California Employers Soon
Topics: Wage & Hour Issues
Effective January 1, 2024, the general statewide minimum wage will increase by .50 cents, bringing the hourly rate from $15.50 to $16.00.
Please also keep in mind that many (around 35-40) cities and counties in California have local minimum wages that apply to all employees and/or certain employment sectors and are usually higher than the state minimum wage. These municipalities include, but are not limited to: Alameda, Belmont, Berkeley, Burlingame, Cupertino, Daly City, East Palo Alto, El Cerrito, Emeryville, Foster City, Fremont, Half Moon Bay, Los Altos, Los Angeles (city and county), Malibu, Menlo Park, Milpitas, Mountain View, Novato, Oakland, Palo Alto, Pasadena, Petaluma, San Carlos, San Diego, San Francisco, San Jose, San Leandro, San Mateo (city and county), Santa Clara, Santa Monica, Santa Rosa, Sonoma, South San Francisco, Sunnyvale, and West Hollywood.
Many of these jurisdictions will be raising their minimum wage requirements in January as well. California employers that employ individuals who work in these jurisdictions (including remote employees), should check the local minimum wage for all jurisdictions where they have workers and note any increase for 2024 to make sure they are complying with local law.
California employers must also keep in mind that the salary test for the primary overtime exemptions in California is pegged at two times the minimum wage. Therefore, this minimum wage increase to $16 also increases the salary test floor for the California professional, administrative, and executive exemptions to $66,560 annually or $1,280 weekly. Effective January 1, 2024, employees who are paid a salary that is less than this will not qualify for these exemptions, regardless of whether they are performing exempt duties.
Finally, it is important to note that the California minimum wage for employees working at all national fast-food chains (limited-service restaurants consisting of 60 or more establishments including their franchised locations) goes to $20 an hour on April 1, 2024. In addition, a recently enacted state law has established a California fast food council that will have the authority to raise that rate again, no earlier than January 1, 2025. With full-time fast-food workers making a minimum of over $41,000 in six months, we expect that this wage increase is likely to put wage pressure on employers in other industries, once this takes effect in April.
For more information about all the new laws in California that California employers must be aware of, please mark your calendar for our annual New California Labor and Employment Laws webinar at 9:30 a.m. (Pacific) on November 28, 2023. Details on this webinar and how to register will be available on the Events Page of our website starting next week.