California’s Minimum Wage Increase

In California, employees are supposed to be paid the minimum wage stipulated in the state law. If employers fail to remit the set minimum wage, it is a violation of California labor and employment laws. The minimum wage is set to increase annually in all industries from January 2017 to January 2022. Of specific focus in this increase is employers with 26 or more employees. As for employers with 25 or fewer employees, the increase will take effect from January 2018 to January 2023.


Frequently Asked Questions (FAQs)


  • What are the new federal regulations with respect to the minimum salary level?

According to these regulations, 10% of the minimum salary level has to be allocated to incentive payments, commissions, and non-discretionary bonuses. This was previously not a requirement.


  • Which minimum wage laws should employers follow among local, state and federal minimum wage laws?

In California, most employers have to adhere to federal as well as state minimum wage laws. Cities also enact their own local base pay laws. This creates confusion on the part of employers. Under such circumstances, employers must follow the law that greatly benefits employees. For instance, California’s law demands a higher minimum wage rate compared to the federal law thus employees must be paid the state minimum wage rates.


  • What does the term minimum salary thresholds mean?

Simply put, the term refers to minimum wage requirements for exempt employees. There exists “white collar” exemptions for employees in job categories such as administrative, executive and professional categories. Initially, California’s minimum salary threshold was $41, 600. However, this has changed with reference to the new Federal Overtime Rule which puts it at $47,476. As a result, an employee is only entitled to this exemption under the “white collar” exemptions if he is paid not less than $47,476.


  • What factors qualify an employee for exempt status or the minimum salary thresholds?

Employers consider a number of factors when determining exempt status. Factors such as if the employee is responsible for the management of the business, charged with decision making or owns a special state license are used to guide employers’ decisions.


  • What action should I take if my employer fails to pay me the required minimum wage?

You can file a lawsuit to compel your employer to pay the wages. Alternatively, you can file a wage claim with the Labor Commissioner’s Office.


  • Which employees are categorized as learners and should they be paid the proposed minimum wage level?

Learners are employees who have little or no experience in the occupations they are in. The law requires that these employees irrespective of their age be paid at least 85% of the base pay.


As a final point, employers must conform to California’s minimum wage requirements. Of key concern should be having precise pay policies that address the interests of both exempt and non-exempt workers. Doing so will avoid the risk of costly lawsuits which can be filed by employees if they feel their right to the set payment has been violated.