California’s minimum wage will increase to $16 per hour for all employers on Jan. 1, 2024.
In 2023, the minimum wage was $15.50 for all employees regardless of employer size. Some cities and counties in California have a local minimum wage that is higher than the state rate.
State law requires that most California workers be paid the minimum wage.
The change in the minimum wage also affects the minimum salary an employee must earn to meet one part of the overtime exemption test. Exempt employees are not subject to the payment of overtime for hours worked. An employee must earn no less than two times the state’s minimum wage for full-time work to meet the initial requirement of the exemption test. As of Jan. 1, 2024, employees in California must earn an annual salary of no less than $66,560 to meet this threshold.
State law requires an annual review of the wage rate using the U.S. Consumer Price Index for Urban Wage Earners and Clerical Workers. The Department of Finance calculated that the U.S. CPI-W increased by 6.16% for the period from July 1, 2022, to June 30, 2023, compared with the prior 12-month period.
On July 31, 2023, Gov. Newsom certified the minimum wage increase for all employers for 2024.
Employers must post the Minimum Wage Order and the Wage Order applicable to their workplace at a worksite area accessible to employees. Employers must ensure that the wage rate is displayed on the employee’s pay stub, and that employees are paid at least the minimum wage even when employees are paid at piece rate.
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