Starting January 1st, 2024, the State of California will increase its minimum wage for most employers to $16.00 per hour. 

Spring and summer of 2024 will also see increases in the minimum wages for employees in two industries—fast food employees at $20.00 per hour (starting April 1st, 2024) and most healthcare employees between $18.00 and 23.00 per hour (starting June 1st, 2024).

California’s minimum wage law overrides the federal minimum wage of $7.25 per hour. If you work in California, you must be paid the higher state minimum wage rate.

California’s minimum wage has increased every year until 2024. 

California Minimum Wage Laws and Regulations

Since 2021, California’s minimum wage has been on a path to increasing gradually over the coming years.

In late July 2023, the California Department of Finance announced that, effective January 1, 2024, the state’s minimum wage is set to increase to $16 per hour.

This change was determined by California’s Labor Code, which requires that once the state’s minimum wage reaches $15 per hour, which has already occurred (the current minimum wage is $15.50 per hour). 

Frequently Asked Questions about Exemption and Pay 

What Happens If Employers Refuse to Pay Workers Their Due Wage?

It is illegal for California employers to pay workers less than the minimum wage. If your employer violates minimum wage laws, you can bring

• a labor board complaint or
• a wage and hour lawsuit.

If the violation affects numerous employees, a wage and hour class action lawsuit may be appropriate.

Cities and Country Wages in California 

Some cities and counties have higher minimum wages than the state’s rate. 

Here is a list of California city and county minimum wages maintained by UC Berkeley. Find out what is considered full-time employment in California.

In addition, many California localities (city and country) have minimum wages. If you work in one of these places, your employer must pay you the higher local minimum wage.

California cities with higher minimum wages include (but are not limited to):

• Berkeley: a minimum wage of $18.07
• Los Angeles: a minimum wage of $16.78
• Oakland: a minimum wage of $16.50
• San Francisco: a minimum wage of $18.07 and
• San Jose: minimum wage of $17.55

Note that starting April 1st, 2024, national fast food chain workers’ minimum wage will be $20 an hour. (AB-1228) Also note that starting June 1, 2024, healthcare workers’ minimum wage will be $23 an hour. (SB 252).

Have You Read? What Does Annual Income Mean? How To Calculate.

Are There Exceptions to Minimum Wage Requirements?

California wage and hour laws provide for several exceptions to the state minimum wage requirements.

The California minimum wage laws do not apply to:

• Student employees, camp counselors, and program counselors of organized camps, who only need to be paid eighty-five percent (85%) of the minimum wage;
• Participants in national service programs such as AmeriCorps;
• Outside salespeople.
• The minimum wage law also does not apply to workers classified as independent contractors, not employees under California employment law.

Mentally or physically handicapped employees must now be paid the minimum wage. Any lawful exceptions to this rule are being phased out.

Do Minimum Wage Laws Apply to Waiters and Other Employees Who Work for Tips?

Employees, such as waiters, who receive a significant portion of their compensation from tips are not exempt from California minimum wage laws. Servers must be paid the same minimum wage as other California employees.

What Can I Do If My Employer Pays Me Less Than the Minimum Wage?

If your employer fails to pay you the applicable state or local minimum wage for any reason, you have the option of suing your employer with the help of a California wage and hour lawyer. 

You may also have grounds to sue the employer’s owners, officers, directors, or managing agents if they caused you to be paid less than the minimum wage.

The minimum damages you would be eligible to receive in a California minimum-wage lawsuit are

• The amount of wages owed to you to bring your compensation up to the minimum wage;
• Interest on that amount;
• Reasonable attorney’s fees; and
• A civil penalty, designed to punish the employer, consists of $100 for the initial pay period of intentional violation and $250 for each subsequent pay period of violation.

You may also be able to receive additional “liquidated damages” equal to the amount of unpaid required minimum wages and interest. In other words, your total recovery might be twice the amount by which your employer underpaid you.

However, your employer will not have to pay the additional “liquidated damages” if s/he can show that the failure to pay you the minimum wage was a good-faith mistake.

Can An Employer Punish Me for Complaining?

It is important to note that it is unlawful for your employer to engage in workplace retaliation against you for complaining about or bringing a lawsuit over their failure to pay the minimum wage.

California $18 Minimum Wage Initiative (2024)

The federal minimum wage is $7.25 per hour in the US. However, 30 states and the District of Columbia have established higher base salaries.

Currently, the base salary in California is $15.50 per hour, and it is set to increase even more. There is an initiative in the state to increase the minimum wage to $18 per hour.

What Is The Initiative To Increase The Minimum Wage To $18 In California?

California voters will consider a proposal on the November 2024 ballot to raise the statewide minimum wage to $18 per hour.

According to Ballotpedia, a “yes” vote supports increasing the state minimum wage to $18 per hour.

The increase would begin in 2025 for large employers and apply to all employers in 2026. Thereafter, the rate would be adjusted annually based on the cost of living.

A “no” vote opposes this ballot initiative, thus maintaining an existing law that establishes a minimum wage of $15 per hour for all employers by January 2023 and provides for increases based on inflation.

Compliance Tips For California Employers In 2024

As we enter the new year, many of us are reviewing what we have done in the past and resolving to make improvements. 

California employers should utilize similar processes to ensure continued compliance with California’s ever-evolving wage and hour laws and best practices. 

However, unlike many of those gym memberships that often start gathering dust by mid-February, the following list of five wage and hour tips needs to be resolutions that stick for California employers to ensure compliance in 2024:

. California Minimum Wage Increases

Starting January 1, 2024, the California minimum wage increased from $15.50 to $16.00 per hour.

Local ordinances may require a higher minimum wage. Here is a link to a list of California city and county minimum wages maintained by UC Berkeley.

1. Salary Exemption Test Increases

With the increase in California’s minimum wage, the salary exempt test rose from $64,480 to $66,560 (2x the minimum wage) for 2024, which is one prong to ensure the administrative, executive, and professional exemptions are properly applied.

The collective exemption minimum of 1.3x the minimum wage for exemptions—that unionized employers might be able to utilize via collective bargaining—rose from $20.15 to $20.80 per hour to qualify.

2. Paid Sick Leave Expansion

Paid Sick Leave increased from three days (or 24 hours) to five days (or 40 hours) (SB 616). Use can be limited to 40 hours or five days per year.

It must be accrued at 40 hours (or 5 days) by the employee’s 200th day of employment or can be front-loaded to avoid accrual and carryover limitations.

Paid Sick Leave carries over to the following year of employment, and the accrual cap increases from 48 hours (or 6 days) to 80 hours (or 10 days).

3. Reimbursement of Business Expenses Review

Existing Labor Code § 2802(a) requires that an employer indemnify (or reimburse) his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.

Following the Thai v. IBM decision, employers who have implemented voluntary work-from-home agreements that shift some expenses associated with such work to the employee should carefully consider the risks associated with those agreements.

4. Wage Statements, Employee Handbooks, and Training

With the above changes to California’s wage and hour laws and the possible expansion of existing requirements based on recent case law.

California employers must ensure that such changes are properly reflected on the employees’ wage statements to avoid direct or derivative liability, according to the requirements of Labor Code §226.

Furthermore, such changes may necessitate updated policies or employee handbooks to ensure continued and up-to-date compliance.

Impact Of California Minimum Wage Increase On Industries

Californians in two industries are set to get new minimum wages just for them this year, and that could lead to pay bumps for other workers, too. 

Gov. Gavin Newsom last year signed two union-backed bills that will boost fast-food and healthcare workers’ minimum wages. 

What Are the Expected Earnings of Fast-Food Workers?

California-based fast-food workers for chains with 60 or more locations around the nation will earn at least $20 an hour beginning in April, $4 higher than the overall state minimum wage of $16 that will be effective Jan. 1st. 

What Are the Expected Earnings of Healthcare Workers?

In June, healthcare workers will earn a minimum of $18, $21, or $23 an hour, depending on what type of facility employs them and where they work. 

Have You Read? How Much Do Registered Nurses Make An Hour in the USA?

The Effects of Higher Minimum Wages

The costs and potential consequences of the higher minimum wage worry some people, including economists and the governor, while others see upsides.

Economist Christopher Thornberg, one of the founding partners of Beacon Economics, said that in a competitive market, increasing minimum wages for the lowest-paid workers will lead to higher prices for consumers. 

Conclusion: What Is California Minimum Wage 2024? | Law, Impact & Compliance?

Starting January 1, 2024, the State of California will increase its minimum wage for most employers to $16.00 per hour. Spring and summer of 2024 will also see increases in the minimum wages for employees in two industries—fast food employees at $20.00 per hour (starting April 1, 2024) and most healthcare employees between $18.00 and 23.00 per hour (starting June 1, 2024).

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