Minimum wage refers to the minimum hourly rate of pay which employees must be paid for their work. This rate varies depending on your city or county, where local minimum wage rates can vary based upon geographic boundaries and even the size of your business.
Anyone who works at least two hours in a one-week period within the State of California is entitled to the State minimum wage for the hours worked. The employee’s employment status, where they live, or where your business is headquartered does not determine the minimum wage that applies. Some workers may be exempt from this law based on their type of work.
All employees must be paid the minimum wage required by federal law. Although there are some exceptions, almost all employees in California must be paid the minimum wage as required by state law. Local entities, such as counties and cities, are able to enact their own minimum wage rates. You are entitled to be paid the higher minimum wage established by the local, state, and federal minimum wage standards. If a locality has not set its own minimum wage that is higher than the State minimum wage, the State minimum wage applies. Federal labor law posters, such as the notice below, explicitly state the federal minimum wage, but your locality may differ significantly from this rate.
For example, the Pasadena City Council adopted a Minimum Wage Ordinance which sets the minimum wage for Pasadena. The Pasadena Minimum Wage Ordinance provides for a greater increase in the minimum wage than does the State of California, and the State of California guarantees a higher minimum wage than the federal rate. City officials claim minimum wage increases imposed will account for differences in the cost of living, economic development, and labor market circumstances . The city's Minimum Wage Ordinance establishes separate guidelines for different Pasadena businesses based on the number of employees, in which those with 25 or fewer employees will be subject to different requirements. Under this current model in Pasadena, small businesses continue to pay lower minimum wage rates.
With the exception of Washington, D.C.’s $17.00 hourly minimum wage, California has the highest minimum wage in the country. While momentum is building to increase the federal minimum wage, which is currently $7.25 per hour, the federal minimum wage has not changed since 2009. Advocates for raising minimum wages argue that such measures assist with reducing poverty and increasing standards of living. Opponents argue that raising minimum wages puts unsustainable pressure on many small businesses who cannot afford increased labor costs, negatively affecting the overall health of the economy and stifling job creation. Though economists have conflicting views on whether rising minimum wages actually increase inflation, with inflation rates hitting record levels, such potential consequences are sure to be a central part of the ongoing national debate.
As a result of congressional inaction, states, counties, and cities have been the primary drivers of increasing minimum wages nationwide, resulting in wide national disparities. For example, a worker earning minimum wages in Alabama, where there is no state minimum wage law and thus minimum wages are equal to the federal minimum wage of $7.25 per hour, could earn less than half of a similarly situated California worker. However, the local cost of living greatly determines the purchasing power of those dollars.
Below, we summarize the minimum wages set by the State of California and other cities within the State. Employers must pay employees the highest applicable minimum wage, this list will indicate which employers and employees qualify for minimum wage increases.
Effective Date
Large Employers (26+ employees)
Small Employers (25 or fewer employees)
1/1/2020
1/1/2021
1/1/2022
1/1/2023
1/1/2024
Further details, including information about the rare exceptions to California’s minimum wage requirements, can be found on the Labor Commissioner’s website.
The UC Berkeley Labor Center offers you real time updates for their database on any local wage or state minimum wage increases, and will add ordinances for other California cities. For unlimited digital access to this database, follow this link.
*Note that South San Francisco has a lower minimum wage than San Francisco
Please be aware that several cities set special minimum wages for workers in particular industries. If you are unsure whether you fall into an alternative category as an employer or employee, please contact the attorneys at Freeburg & Granieri, APC.
For employees, it is important that you are paid all wages owed, including all applicable minimum wages. You should check your paystubs to make sure you are being properly paid by your employer. If you think you are not being paid all your wages, please contact the attorneys at Freeburg & Granieri, APC today.
For employers, now is the perfect time to review your payroll policies and practices. The liability for failing to comply with minimum wage laws can have devastating effects on your business. Please contact the attorneys at Freeburg & Granieri, APC today to have your payroll policies and practices reviewed.
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