It’s not just the price of gas that’s on the rise in California. California’s minimum wage, at both the state and the local level, is being raised, again.
Earlier this month, California Governor Gavin Newsom announced that California’s minimum wage will increase to $15.50 for all employees, effective January 1, 2023. Previously, California had different minimum wages for employers with 26 or more employees and for smaller employers. Effective January 1, however, the new minimum wage will be the same for all employers, regardless of size. This increase is based on Labor Code amendments made back in 2016, which mandated a gradual increase in the state’s minimum wages, including an automatic increase to account for inflation. And, of course, inflation is here.
The minimum wage requirement may not be met just by compliance with state law, however. Employers should keep in mind that some 30 California cities and counties have their own separate minimum wages with different effective dates. In Los Angeles, for example, the minimum wage will increase to $16.04 for all covered employees in both the Los Angeles City and to $15.96 in unincorporated areas of Los Angeles County, effective July 1, 2022. Similarly, in Berkeley and San Francisco, the minimum wage will increase to $16.99, also effective July 1, 2022. On top of this, some cities and counties also impose higher paid sick day requirements than does the State of California.
California employers must take care, therefore, to ensure they are in compliance with both state and local minimum wage and paid sick day requirements, which may change annually on the first of the year or at mid-year, depending on the locality. And, of course, remote employees may be subject to different local minimum wage rates than when they physically work at an employer’s worksite.
John Viola is a partner in Thompson Coburn’s Labor and Employment practice group.