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Making Sense of Minimum Wage Requirements


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With different federal, state, local, and industry-specific minimum wage requirements, how do I know if I am properly paying my California employees?

The first step to compliance is determining which minimum wage applies to your employees.

When it comes to your California employees, you won’t have to worry about the federal minimum wage — that’s because at $7.25 per hour, it’s substantially less than California’s required minimum wage.

When state and federal law differ, you must follow the law that is more protective of employees. The California state minimum wage is higher, so that is the rate that you must pay employees in California.

California Minimum Wage

California’s minimum wage applies to all non-exempt (or hourly) employees in the state — unless, as discussed below, they are covered by a local ordinance or industry-specific minimum wage. California’s minimum wage is currently $16 per hour and is set to increase to $16.50 per hour on January 1, 2025.

The November 2024 election gave California voters a chance to weigh in on the state minimum wage with Proposition 32, which voters rejected.

Industry-Specific

You also should confirm whether either of California’s industry-specific minimum wages apply to your employees. Currently, there are separate minimum wage requirements for certain fast food and health care workers.

The minimum wage for fast food workers is $20 per hour, and the minimum wage for health care workers varies from $18 to $23 depending on the type of health care facility in which they work. If your employees are covered by either of these laws, they must be paid the higher, industry-specific minimum wage — not the state minimum wage.

Local Ordinances

It’s important also to determine whether your employees work in cities or counties that have local minimum wage ordinances. The ordinances generally apply based on where your employees are working, not where your business is located. So, pay close attention to employees who are working away from your facilities, such as from their home or at client sites.

Once you have confirmed which minimum wage applies to your employees, ensure that employees currently are being paid at least that wage and then increase their pay as needed whenever the minimum wage increases.

Exempt Employees

Lastly, don’t forget about your exempt employees. The salary test for the executive, administrative, and professional exemptions is based on the California minimum wage and thus increases when the minimum wage increases. The fast food and health care worker minimum wage laws set a higher salary test for exempt employees so ensure that any exempt employees covered under those laws meet the applicable test.


Column based on questions asked by callers on the Labor Law Helpline, a service to California Chamber of Commerce preferred members and above. For expert explanations of labor laws and Cal/OSHA regulations, not legal counsel for specific situations, call (800) 348-2262 or submit your question at www.hrcalifornia.com.

Erika Barbara

This post was originally published on this site

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