Oakland—California’s minimum wage will increase to $15.50 per hour for all employers on January 1, 2023. 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. Workers paid less than the minimum wage are urged to contact the Labor Commissioner’s Office in their area to file a wage claim.
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 working overtime hours. An employee must earn no less than two times the state’s minimum wage for full-time work to meet this initial requirement of the exemption test. As of January 1, 2023, employees in California must earn an annual salary of no less than $64,480 to meet this threshold requirement.
In 2016, California passed a law to raise the minimum wage to $15.00 per hour statewide by 2022 for large businesses with 26 or more employees, and by 2023 for small businesses with 25 or fewer employees. This law increased the minimum wage over time, consistent with economic expansion while providing safety valves if adverse economic conditions emerged.
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