Thanks to a new California Law, California minimum wage workers will soon see an increase in their paychecks. The new minimum wage law also puts California in place with the highest statewide minimum wage rate in the nation – $15.00 per hour. The minimum wage rate high will take several years to realize and may be temporarily postponed depending on certain economic conditions. However, employers should be prepared for the first minimum wage increase beginning January 1, 2017.
Not all employers will be required to pay a minimum wage rate at the outset. Employers with 26 or more employees will be responsible for the first increase to $10.50 per hour starting January 1, 2017. Employers with 25 or fewer employees will have an extra year to prepare for the increase. For these employers, the minimum wage rate will increase to $10.50 per hour beginning January 1, 2018.
California’s minimum wage will increase in annual increments until it reaches $15.00 per hour for all employees, regardless of employer size. Each year thereafter, the minimum wage rate will increase based on changes in the Consumer Price Index to be effective the following January 1.
| Employers with 26 or more employees | Employers with 25 or fewer employees | |
| January 1, 2016 | $10.00 per hour | $10.00 per hour |
| January 1, 2017 | $10.50 per hour | |
| January 1, 2018 | $11.00 per hour | $10.50 per hour |
| January 1, 2019 | $12.00 per hour | $11.00 per hour |
| January 1, 2020 | $13.00 per hour | $12.00 per hour |
| January 1, 2021 | $14.00 per hour | $13.00 per hour |
| January 1, 2022 | $15.00 per hour | $14.00 per hour |
| January 1, 2023 | $15.00 per hour |
The Governor has the power to suspend a minimum wage increase up to two times depending on economic conditions. Also, the law does not prevent local governments from establishing higher minimum wage rates as many communities have done. The law will also raise the salary threshold for overtime exempt employees under the California Labor Code. Along with California, New York has approved raising its minimum wage rate to $15.00 per hour by January 1, 2022.