On July 27, 2022, California’s Department of Finance confirmed that due to the raising inflation, the minimum wage for all employers will increase by 3.5% to $15.50 per hour on January 1, 2023.

California’s minimum wage not only impacts minimum wage workers, but it also effects the salary required for employees to qualify as an exempt employee. Here are five reminders about the California minimum wage increase and its impact upon exempt employees:

1. As of January 1, 2023, the minimum wage in California will increase to $15.50 for all employers – large and small.

The minimum wage increase on January 1, 2023 will set the same minimum wage for large and small employers, unlike recent minimum wage increases which provided for a lower amount required for smaller employers with 25 or fewer employees. The increase on January 1, 2023 will be especially hard for small employers given the $1.50 increase in minimum wage (increase from the current $14.00 per hour) for these companies.

2. With the increase in the state minimum wage, there is a corresponding raise in the minimum salary required to qualify as exempt under the “white-collar” exemptions.

To be exempt from the requirement of having to pay overtime to the employee, the employee must perform specified duties in a particular manner and be paid “a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.” (Lab. Code, § 515, subd. (a).) Therefore, on January 1, 2023, to qualify for...

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