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  • Daniel Rodriguez

California Minimum Wage Increasing in 2024

On July 31, 2023, the Director of Finance released a statement confirming that California’s minimum wage will increase from $15.50 to $16.00 per hour, effective January 1, 2024.


California Minimum Wage increasing in 2024

What is the California Minimum Wage for 2024?

The minimum wage in California will be $16.00 per hour for all employers, regardless of their size, effective January 1, 2024.


What is the California Minimum Wage for exempt employees in 2024?

The increase in the minimum wage also affects the minimum salary of full-time exempt employees. Because the minimum salary for an exempt employee must double the minimum wage, the minimum salary for a full-time exempt employee will be $66,560 annually, effective January 1, 2024.


Why is the minimum wage increasing?

Per labor code §1182.12C, the California Director of Finance must determine whether California’s minimum wage must be increased due to inflation. The Director of Finance can increase the minimum by 3.5% or the rate of inflation, whichever is less. The Consumer Price Index (CPI-W) has risen by 6.16% from July 1, 2022, to June 30, 2022 - therefore, the minimum wage must be increased by 3.5% to $16.00 per hour.


Local Minimum Wage Laws Still Apply

Despite the increase in minimum wage for the entire state, some cities and counties have higher minimum wages than the new state minimum wage. However, local minimum wage laws do not affect the minimum salary of an exempt employee.


What does this mean for employers?

Employers that utilize a labor force earning minimum wage or managers earning the minimum salary for exempt workers will have to be prepared to switch on January 1 to remain compliant with California’s minimum wage change.


Employers rely heavily on minimum-wage workers, and managers must also plan their resources appropriately. The change in the minimum wage also affects taxes and benefit payments such as 401k matches.


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