California Minimum Wage Laws
California’s minimum wage laws contain nuances and details that differ from other states in the country. Learn about California’s wage laws in detail, how they affect the state’s economy, and how our attorneys can help if your employer isn’t paying you the appropriate minimum wage.
Minimum wage laws were established to place a floor on the lowest legal wage a company could pay its employees.
In the United States, many cities and states have their own minimum wage, and employees receive whichever minimum wage is higher: local or federal.
The purpose of an established minimum wage is to prevent companies from exploiting workers, but unfortunately, the minimum wage has lagged behind inflation and rising costs in recent years.
President Franklin D. Roosevelt originally set the first United States minimum wage in the 1938 Fair Labor Standards Act (FLSA). This was an effort to protect workers (especially child workers) during the Great Depression as part of the New Deal.
California’s minimum wage laws contain nuances and details that differ from other states in the country.
What is California's current minimum wage?
From January 1, 2017, to January 1, 2022, California annually increased the minimum wage for all industries (for companies with 25 or fewer employees, the increase is occurring from 2018 – 2023).
The latest minimum wage schedule in California is:
- January 1, 2020: 25 or Less Employees = $12.00/hour, Over 25 Employees = $13.00/hour
- January 1, 2021: 25 or Less Employees = $13.00/hour, Over 25 Employees = $14.00/hour
- January 1, 2022: 25 or Less Employees = $14.00/hour, Over 25 Employees = $15.00/hour
- January 1: 2023: 25 or Less Employees = $15.00/hour, Over 25 Employees = $15.00/hour
What are California's minimum wage laws?
The California Code of Regulations section 11040 describes the minimum wage laws in the state.
Effectively, California enacted a new minimum wage phase-in effort to increase the minimum wage by $1.00/hour every year from 2017 – 2023. Based on the latest California Minimum Wage order, it is set to cap out at $15.00/hour in 2023 regardless of company size.
The minimum wage currently differs based on company size, requiring companies with 26 or more employees to pay a minimum wage of $1.00/hour more than companies with 25 or fewer employees.
California Minimum Wage Exemptions
Certain types of employees are exempt from California’s minimum wage standards.
The first group for which there is an exemption is learners. Regardless of their age, learners are individuals who do not have any previous or similar experience in an occupation and are therefore learning on the job. Their minimum wage is 85% of the state’s minimum wage rounded to the nearest nickel and can only apply to the first 160 hours of employment.
There are also additional exemptions to the minimum wage law, including outside salespersons, apprentices indentured under the State Division of Apprenticeship Standards, and individuals who are the parent, spouse, or child of the employer.
How do minimum wage rates affect the state's economy?
As political pressure builds to increase the minimum wage for all, individuals have discussed the economic impacts that an increased minimum wage may have on California’s economy.
According to the Congressional Budget Office, increasing the minimum wage is a double-edged sword. Raising the minimum wage would increase the incomes of most low-wage workers and lift many families out of poverty, but it would also cause other low-wage workers to lose their jobs and potentially struggle to provide for their families.
An increase in the minimum wage would raise the cost of employing low-wage workers, causing some employers to employ fewer workers. The impact of businesses facing an increase in the cost of labor could ripple across several industries and even leave certain people out of work indefinitely.
An analysis conducted by Berkeley’s IRLE Institute examined the potential effects of increasing the minimum wage in California and, specifically, Fresno.
They found that increasing the minimum wage to $15 by 2023 would:
- Boost earnings for 5.26 million workers (38 percent of California’s workforce)
- Increase annual pay among those receiving raises by 25.4 percent
- Provide raises to private-sector workers in California, including restaurant, retail, and health-service workers
- Provide an increase in employee productivity and reduce employee turnover
- Cause businesses to increase the costs of their products due to increased cost of labor
Suffice it to say, the situation is complex, especially with the large state economy of California. There are both positive and negative aspects that come from steadily increasing the minimum wage, and the state should be prepared to tackle these challenges as they arise.
What can I do if my California employer isn't paying me the appropriate minimum wage?
If your employer isn’t paying you the appropriate minimum wage in California, the first thing you can do is file a claim with the Labor Commissioner’s Office.
An employment attorney at Cutter Law has the experience to help you navigate the entire process and get you the compensation you deserve.
Should I hire an employment law attorney to help me receive the appropriate wages in California?
A caring and knowledgeable law attorney will be an invaluable resource for anyone navigating wage disputes in the state of California.
The employment law attorneys at Cutter Law can help you:
- Fight for unpaid and deserved wages
- Dispute wage and hour violations
- Litigate wrongful termination
- Provide whistleblower protections
- Handle consumer deception cases
Peggy B., a past client of Cutter Law, recently said:
“The Cutter law firm’s primary focus is giving their clients the ultimate care they deserve with their very best interests at heart. The focus group conducted earlier by them was friendly, professional, and with the utmost courtesy. This is representation one hopes to achieve from their attorney, and Cutter Law exceeds that hope.”
Bryan H. also related his positive experience, saying:
“My experience with Cutter Law has been extremely positive. The staff are professional, responsive, and passionate about their clients. Highly recommend this law firm.”
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Contact us today for a free case review, and we’ll help you get the compensation you deserve from your employer.