If your workers fall under these categories, you don't have to abide by the highest statewide minimum wage in the U.S.
California currently holds the highest statewide minimum wage in the United States with $14 an hour for employers with 25 or less employees and $15 an hour for employers with 26 or more employees.
However, there are certain Californian cities and counties who offer their own minimum wages such as Berkeley with a minimum wage of $16.32, San Francisco with $16.32 and San Jose with a minimum wage of $16.20. If the Californian city or county has a higher minimum wage than the state’s, then the employer must pay the higher minimum wage.
Read more: Paying below California minimum wage requirement – is it legal?
The minimum wage of “The Golden State” is set to increase soon. Governor Gavin Newsom announced on May 12 that California’s minimum wage is projected to increase to $15.50 per hour for all employees and workers starting January 1, 2023. The increase, trigged by historic inflation, will benefit about 3 million workers and is covered by Section 246 of the California Labor Code.
If someone else gets their way, then the minimum wage will climb even higher. According to The Los Angeles Times, anti-poverty activist and entrepreneur Joe Sanberg filed the Living Wage Act of 2022, which seeks to raise the state’s minimum wage to $18 an hour by as soon as 2025. Under the proposal, the state’s minimum hourly wage would increase annually by $1 on Jan. 1, until 2025 for bigger employers and 2026 for smaller employers. Afterward, the minimum wage would go up each year by the rate of inflation of up to 3.5%.
The proposal would also allow a governor to suspend minimum wage increases for a year if the state has a significant budget deficit or a decline in job growth or sales tax revenue. Despite the COVID-19 pandemic, Gov. Gavin Newsom declined to suspend minimum wage increases in 2020.
While Californian law on minimum wage applies to the majority of employees and workers, there are some circumstances where minimum wage laws do not apply. For instance, student employees and camp counsellors can be exempted from the law since they are only paid 85% of the minimum wage. National service program participants such as people involved in AmeriCorps are also exempted from the law.
Other employees exempted from the California minimum wage laws are salespersons who spend most of their working hours outside of their office, as well as the mentally ill and physically disabled workers under authorized non-profits and rehabilitation establishments.
For more information on California’s minimum wage requirements, click here.