As you may know, a California minimum wage increase occurs for employers with 26 or more employees on January 1, 2017. This change is due to Law SB3 which increases the California minimum wage to $15.00 per hour for large employers by the year 2022. Firms with 25 or fewer employees must meet this minimum pay rate by 2023. Once this rate of $15.00 per hour is reached, rates will then increase up to 3.5 percent (rounded to the nearest 10 cents) in relation to inflation. Below is the chart that shows the minimum wage schedule through 2023.
Date Employers With 26 or More Employees Employers with 25 or Fewer Employees
01/01/2017 $10.50 per hour $10.00 per hour
01/01/2018 $11.00 per hour $10.50 per hour
01/01/2019 $12.00 per hour $11.00 per hour
01/01/2020 $13.00 per hour $12.00 per hour
01/01/2021 $14.00 per hour $13.00 per hour
01/01/2022 $15.00 per hour $14.00 per hour
01/01/2023 $15.00 per hour $15.00 per hour
Note that this increase in minimum wage affects the exempt from overtime limit also. California labor law requires that anyone not subject to overtime must earn at least twice the minimum wage. As of December 1, 2016, federal law requires employees earnings to be $47,476 annually ($913 weekly) in order to be exempt from overtime. Review your pay scale for any employees currently classified as non-exempt. This will help you keep track of whether or not an employee is to receive overtime pay.
Also, keep in mind that you must post current labor law posters showing the minimum wage. If an employee’s rate of pay will increase on January 1, 2017, they must receive notice from the employer by January 7, 2017. However, this notice is not required if the change is reflected on a timely itemized wage statement given no later than January 7.
Remember that if you are in the City of Los Angeles, or unincorporated cities under county jurisdiction, there is a different pay scale which must be followed as it goes into effect at a faster rate than the state minimum wage.
| Effective Date | Employers With 26 or more Employees | Employers with 25 or fewer Employees or Non-Profit corporations with 26 or more Employees with approval to pay a deferred rate | ||
| 7/1/2016 | $10.50 | $10.00 (CA State Minimum Wage) | ||
| 7/1/2017 | $12.00 | $10.50 | ||
| 7/1/2018 | $13.25 | $12.00 | ||
| 7/1/2019 | $14.25 | $13.25 | ||
| 7/1/2020 | $15.00 | $14.25 | ||
| 7/1/2021 | $15.00 | $15.00 | ||
Be sure to follow the guidelines within your city to make sure you are meeting the required minimum wage for your location.
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