Written by

Kari J. BrownLisa Ann Hilario

2025 California Minimum Wage Increases to $16.50 per Hour

Under current law, the California minimum wage will increase to $16.50/hour as of January 1, 2025, (up from $16/hour).  This new wage applies to all employers (regardless of size) unless they are subject to a higher minimum wage specific to their industry or the city or county where their employees work.  Information about the current law is available at faq_minimumwage.htm

Proposition 32 Proposes a California Minimum Wage Increase to $18 per Hour

Proposition 32, a measure on the November 5, 2024 ballot, proposes to increase the California minimum wage to $18/hour over the next two years.  If passed, the state minimum wage would increase to $18/hour on January 1, 2025, for employers with 26 or more employees, and on January 1, 2026 for employers with 25 or fewer employees.  Read about Proposition 32 in your Voter Information Guide or at voterguide.sos.ca.gov/propositions/32/ and cast your vote on November 5.  We’ll inform you of the election results on Proposition 32 in a future SMT Employment Law Bulletin after Election Day.

2025 California Minimum Salary for Exempt Employees Increases to $68,640 per Year

To be exempt from timekeeping, overtime and rest/meal break laws, California law requires that exempt employees be paid a salary of at least two times the State minimum wage.*  With the increase in the California minimum wage to $16.50/hour, the minimum exempt salary will increase to $68,640/year (up from $66,560/year) on January 1, 2025.  If Proposition 32 passes and the minimum wage is further increased, the minimum exempt salary will increase as well.

*This minimum salary requirement is just one element of the exemption employers must satisfy to lawfully classify an employee as exempt.  In addition, exempt employees must be paid on “salary basis” and their duties must meet other requirements of the executive, administrative, professional, or a handful of other exemptions set out in the Industrial Welfare Commission Order that applies to your industry or occupation.  The exemptions can be found in Section 1 of the Wage Orders available at wageorderindustries.htm.
Fast Food Worker Minimum Wage Effective April 1, 2024, certain employers in the fast food industry became subject to a $20/hour minimum wage.  To find out if this law applies to your business, see the Division of Labor Standards Enforcement Frequently Asked Questions at Fast-Food-Minimum-Wage-FAQ.htm.

Health Care Worker Minimum Wage

A different California law sets a higher minimum wage for employees who (1) work for certain “health care facilities” and (2) provide health care services or support the provision of health care.  The health care worker minimum wage ranges from $18/hour to $23/hour depending on the type and size of the employer.  This law was set to take effect on July 1, 2024, but has been postponed due to state budget issues.  The law could go into effect as early as October 15, 2024, and as late as January 1, 2025.  Employers are advised to plan for an October 15, 2024 deadline, but to keep an eye out for updates.  For more information about the health care worker minimum wage, see the Division of Labor Standards Enforcement Frequently Asked Questions at Health-Care-Worker-Minimum-Wage-FAQ.htm.  FAQ 12 addresses the law’s effective date and will be updated as events evolve in Sacramento.

Local Minimum Wage Ordinances

Forty California cities have adopted their own ordinances requiring payment of a higher local minimum wage to employees who work in those cities as few as 2 hours per week.  2024 local minimum wage rates range from $16.17/hour to $19.36/hour.  Most ordinances increase the minimum wage each January 1, while a select few increase each July 1.  January 1, 2025 increases have not yet been announced.  To find out if a city where your employees work have adopted a local minimum wage ordinance, contact an SMT employment law attorney or check your city website.  Watch for future SMT Employment Law Bulletins for announcements as we get closer to January 2025.

Have questions?  Contact an SMT employment law attorney.

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Spaulding McCullough & Tansil LLP
Employment Law Group