California Minimum Wage and Minimum Salary Increases Go Into Effect On January 1, 2019

California’s minimum wage will eventually reach $15 per hour in 2022, with an increase occurring every January 1st until then. The schedule of increases depends on the size of your business. California businesses with 26 or more employees will reach $15 per hour in 2022, and businesses with 25 or fewer employees will have until 2023 to reach the $15 per hour rate.

In the meantime, starting January 1st, 2019, California employers with 26 or more employees must begin paying a minimum wage of $12.00 per hour, and employers with 25 or fewer employees must begin paying a minimum wage of $11.00 per hour.

Exempt Salary Thresholds Will Also Increase

The state minimum wage increases affect the minimum salary employers must pay to exempt employees in order for employees to meet the salary basis test for the particular exemption claimed. Beginning January 1st, 2019, in order to satisfy the salary basis test for exempt employees, California employers with 26 or more employees must begin paying a salary of at least $4,160 per month (or $49,920 per year), and employers with 25 or fewer employees must begin paying a salary of at least $3,813.33 per month (or $45,760 per year).

Local Minimum Wage Ordinances

Some cities and counties in California have adopted their own local minimum wage rates that are different from the state rate. Eligibility rules may vary from city to city. If a local ordinance provides for a higher minimum wage rate than the California rate, the local rate must be paid. However, these local rates do not affect the salaries that must be paid to employees to establish the salary basis test for exempt employees.

The minimum wage will increase on January 1st, 2019 in the following cities:

• Belmont: $13.50
• Berkeley: $15.00 (went into effect October 1, 2018)
• Cupertino: $15.00
• El Cerrito: $15.00
• Los Altos: $15.00
• Mountain View: $15.65
• Oakland: $13.80
• Palo Alto: $15.00
• Richmond: $15.00
• San Diego (the city, not county): $12.00
• San Jose: $15.00
• San Mateo: $15.00 ($13.50 for nonprofits)
• Santa Clara: $15.00
• Sunnyvale: $15.65

Several other jurisdictions have their own minimum wage ordinances with increases that go into effect on July 1st, 2019: Emeryville, the City of Los Angeles, the County of Los Angeles, Malibu, Milpitas, Pasadena, San Francisco, San Leandro and Santa Monica.