Question: As a business owner I know California’s minimum wage increases each year. What is the minimum wage I should be paying my employees this year?
Answer: Effective Jan. 1 of this year California’s minimum wage increased to $15.50, regardless of the number of employees a business has. Prior to Jan. 1, 2013, if a business had 26 or more employees it was required to pay a higher minimum wage than a business that employed 25 or fewer employees. It no longer matters how many employees a business has; all employers are required to pay non-exempt hourly employees at least $15.50 per hour unless a higher local minimum wage rate applies.
Also, all future increases to the minimum wage rate will be calculated by the California Department of Finance. The minimum wage rate will be adjusted annually for inflation based on the United States Consumer Price Index for Urban Wage Earners and Clerical Workers (U.S. CPI-W). However, the minimum wage rate will not be increased by more than 3.5% in any one year.
Employers also need to be aware of the 39 cities and counties in California that have adopted local minimum wage ordinances establishing a minimum wage rate that is higher than $15.50 per hour in 2023. Employees working in any city or county that has adopted a higher minimum wage rate than California’s minimum wage rate must be paid the higher local rate. Employers who are unsure if their employees work in a city or county that has adopted a minimum wage rate ordinance can refer to...
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