U.S. Air Force file photo

As of Jan. 1, 2023, California’s minimum wage will see an increase from $15.00 per hour for all employees to $15.50 per hour.

California raised the minimum wage for businesses with more than 25 employees to $15.00 per hour in 2016. Businesses with 25 or fewer employees have progressively seen the minimum wage climb annually starting at $10.00 per hour in 2017 to the more recent $14.00 per hour in 2022.

As of Jan. 1, 2023, state minimum wage for employees will sit at $15.50 per hour for all sized employers.

Federal minimum wage, which remains unchanged since 2009, is currently $7.25 per hour.

In addition to the minimum wage, the change also affects the minimum salary employees must earn in order to meet part of the overtime exemption test.

Exempt employees are not eligible for overtime for working overtime hours. To meet the requirement of the exemption test, employees must earn no less than twice the state’s minimum wage ($31.00/hr) for full-time work.

An annual review of the United States Consumer Price Index for Urban Wage earners and Clerical Workers (U.S. CPI-W) by the Department of Finance is required as a protection of the minimum wage law.

In July, the U.S. CPI-W determined the inflation rate had increased by 7.9%, requiring a 3.5% increase to the current hourly minimum wage. The department will determine the rate of change based on the two most recent averages.

In 2023, the department will determine the rate of change based on the average of the two most recent rate changes.

In the case of a negative average, the minimum wage will remain the same.

Employers are required to post information on wages, hours and working conditions in a visible and accessible area to employees.

Employers can download notices in both English and Spanish from the workplace postings page on the Department of Industrial Relations (DIR) website.

Wage rates must also be available to employees on their individual pay stubs.

Questions or complaints may be directed to the Labor Commissioner’s Office Call Center in English or Spanish by calling 833 LCO-INFO (833 526-4636).