Golden State business owners know the importance of staying current with minimum wage regulations. Of course, you want to ensure that your business is compliant. It’s important to be aware of the changes occurring in California’s minimum wage landscape to plan better for your future.
This quick guide will tell you everything you need to know about California’s minimum wages in 2023.
What is California’s Minimum Salary?
California’s minimum wage for employers with 25 or fewer employees in 2022 is $14 per hour. Employers that have 26 or more employees are paid $15 per hour. To level the playing field, all employers will see their minimum wage rate rise to $15.50 in 2023. This means that employees who earn $14 per hour in 2023 will see an increase of $1.50/per hr. Nonexempt employees will get the same minimum base salaries.
California’s labor laws also include local regulations that add complexity. You may be required to pay multiple minimum wages for the same day if you operate in more than one place. Incorrect calculations could lead to wage-and-hour lawsuits.
Paycor has put together this California minimum-wage chart by city and by county.
California’s local governments saw many minimum wage hikes on July 1, 2022. Please note that the California minimum wage has increased to $15.50/hr since January 1, 2023. The federal minimum wage, however, is still $7.25/hr.
Are there any California exceptions to the minimum wage requirements for California?
California’s wage-and-hour laws permit several exceptions to the state’s minimum wage requirements.
California’s minimum wages laws do not apply:
Only eighty-five percent (85%) must be paid to student workers, camp counselors, or program counselors of organized camps.
Participants in national programs such as AmeriCorps
Outside salespeople. An “outsider” is an employee who spends more than half of their work hours outside the employer’s workplace, selling items or getting orders.
Who Will be Impacted?
According to SEIU, most of California’s fast food workers are people of color or women. According to a union survey of fast-food workers, 85% reported being subjected to wage theft by their employers or denied their rightfully earned wages.
California’s fast food industry faces increased standards and accountability that could significantly impact all workers.
Jacobs states, “If this policy is successful, then other states can be expected that they will adopt similar policies–not just for fast food, nor in other low-wage industry sectors.”
Representatives from fast food warn that consumers might lose out. California Restaurant Association (reckless) claims the bill will cause a 20% rise in customer prices. Based on a University of California Riverside study in 2019, this figure is based on a 60% increase expected in worker pay.
What is a Minimum Salary?
The minimum wage is the lowest possible hourly rate that can afford to be paid to most workers. It is also known to be a minimum wage. The Fair Labor Standards Act in the U.S. (FLSA) determines the minimum wage for employees working in the private and public sectors and Federal and State government. Nonexempt employees are required to be paid the minimum wage and higher, according to the FLSA. Not all employees are exempt from the FLSA’s minimum wage requirements. For example, those who aren’t protected under the Fair Labor Standards Act can be paid less than the minimum wage.
Will All Workers Need to Receive the New State Minimum wage?
You can determine how much you need to pay your workers based on their status as exempt.
Exempt employees are not entitled to overtime pay. They must instead receive $684 per week in salary. This amounts to approximately $17 an hour for 40-hour weeks (well above the state’s minimum income).
Nonexempt employees can be either salaried or hourly workers. However, they must receive the federal, local, or state minimum wage.
California’s classification follows the same pattern as federal requirements. California’s income and job titles are important factors. California’s minimum wage requirements for employees exempt from federal regulations are:
$58,240/year for businesses with 25- or fewer employees
$62,400 when you have over 25 employees
The new minimum salary requirement for exempt employees in California is $64,480 per year or $53,373.33 per mth. It will go into effect on January 1, 2023. Small businesses should be aware that updates are coming to all businesses.