In 2018, California’s minimum wage increased to $11 per hour for businesses with 26 employees or more and $10.50 per hour for businesses with 25 employees or less. The minimum wage increase is part of California’s plan to increase the minimum wage each year until reaching $15 per hour in 2022. At the same time, California cities have continuously initiated their own minimum wage increases.
According to state estimates, more than two million workers earn the minimum wage rate in California.
California’s plan to raise the minimum wage to $15 by 2022 does have a few exceptions. The increase will be delayed one year for employers with 25 employees or fewer, so that small businesses have one extra year to ultimately comply with the new minimum wage—in other words, $15 by 2023. Also, the scheduled increases may be suspended by the governor based on certain determinations, such as negative job growth. Some employees are exempt from the minimum wage law, such as outside salespersons, individuals who are the parent, spouse, or child of the employer, and apprentices regularly indentured under the State Division of Apprenticeship Standards.
The Minimum Wage Order (MW-2017) contains an exception for “learners,” regardless of age, who may be paid not less than 85% of the minimum wage rounded to the nearest nickel during their first 160 hours of employment in occupations where they have no previous similar or related experience. There are also exceptions for mentally and/or physically disabled employees, and for nonprofit organizations. Nonprofits and those employing disabled workers may be issued a special license by the Division of Labor Standards Enforcement authorizing employment at a wage less than the legal minimum wage.
Local entities, i.e. cities and counties, are permitted to adopt their own minimum wage rates for employees working within their jurisdiction. The effect of having different federal, state, and local minimum wage rates governing a worker or location is that the employer is required to pay the highest of those rates applicable to the employee. California cities with a higher minimum wage than the state rate include:
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