On January 1st, 2018 the minimum wage in the state of California will increased from $10.50 to $11.00 an hour for employers with 26 or more employees. The minimum wage for employers with 25 or less employees will increase to $10.50. There are some employees who 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.
Please also note that a number of cities already have minimum wages that differ from the state minimum. See table below.
For more information please visit the Department of Industrial Relations website: http://www.dir.ca.gov/dlse/faq_minimumwage.htm.
California’s Minimum Salary
Although the federal minimum salary threshold proposed in 2015 was placed on hold (as of November 2016), California’s minimum salary threshold remains in effect, and will change for certain employers in 2018 based on scheduled minimum wage increases.
The “white collar” exemption is based on a minimum monthly salary of no less than two times the state minimum wage for full-time employment. In 2018, this rate is $3,640 per month or $43,680 per year based on the $10.50 per-hour minimum state wage for employers with 25 employees or less. For employers with 26 or more employees, the state minimum wage will increase to $11.00 beginning in January 2018, resulting in a new minimum salary threshold of $45,760.
(Note: This information is provided as a service and may be subject to change. Please visit the Department of Industrial Relations website for the latest information.)
|CITY||2018 MINIMUM WAGE RATES|
|California State||$11.00/hr (26 or more employees) $10.50/hr (25 or fewer)|
|Berkeley||$13.75/hr effective 10/1/17. $15.00/hr effective October 1, 2018|
|Cupertino||$13.50/hr effective 1/1/18|
|El Cerrito||$13.60/hour effective 1/1/18|
|Emeryville||$15.20/hr for 56 or more employees as of 7/1/17 and $15.60/hr on 7/1/18. For 55 or fewer, $14.00/hr on 7/1/17 and $15.00/hr per hour on 7/1/18.|
|Los Altos||$13.50/hour effective 1/1/18|
|Los Angeles||Increase to $12.00/hr on 7/1/17 for 26 or more employees and increase to $13.25/hr on 7/1/18. For 25 or fewer, $10.50/hr on 7/1/17 and $12.00/hr per hour on 7/1/18.|
|Los Angeles County||Increase to $12.00/hr on 7/1/17 for 26 or more employees and increase to $13.25/hr on 7/1/18. For 25 or fewer, $10.50/hr on 7/1/17 and $12.00/hr per hour on 7/1/18.|
|Malibu||Increase to $12.00/hr on 7/1/17 for 26 or more employees and increase to $13.25/hr on 7/1/18. For 25 or fewer, $10.50/hr on 7/1/17 and $12.00/hr per hour on 7/1/18.|
|Milpitas||Increase to $12.00/hr on 1/1/18|
|Mountain View||Increase to $15.00 on 1/1/18|
|Palo Alto||Increase to $13.50/hr|
|Richmond||Increase to $13.00/hr on 1/1/18|
|San Leandro||Increase to $13.00/hr on 7/1/17 and increase to $13.00/hr on 7/1/18.|
|San Mateo||Increase to $13.50/hr on 1/1/18. For non-profits, increase to $12.00/hr on 1/1/18.|
|San Francisco||Increase to $14.00/hr as of 7/1/17. Increase to $15.00/hr on 7/1/18.|
|Santa Monica||Increase to $12.00/hr on 7/1/17 for 26 or more employees and increase to $13.25/hr on 7/1/18. For 25 or fewer, $10.50/hr on 7/1/17 and $12.00/hr per hour on 7/1/1|
|Sunnyvale||Increase to $15.00/hr on January 1, 2017|
Please review your employee pay rates, overtime rates, salary amounts and other pay rates to ensure you are meeting the new requirements. Changes to your employee’s pay rates are only made by authorized persons within your organization. Any changes or revisions to rates of pay should be adjusted using your normal payroll input method (PayEntry, M3Online, phone, email). California Payroll will process the information provided by employers. California Payroll does not determine or audit rates of pay for processing. Remember to review your Register Prior to Processing or your Input Worksheet for pay rate information. M3Online and PayEntry users can view employee’s information directly in the system and there are a number of reports available to view your employees’ information.
State enforcement agencies have made it a top priority to stop employers from engaging in “wage theft,” which includes not paying the minimum wage for all hours worked. Employers should examine all pay practices that may need review; this includes overtime rates of pay, base salaries, piece rates, non-productive time, commission and more.
Please contact your Client Manager with any questions, (925) 240-2400.
To avoid penalties, make sure you display the most current rates on your required labor notices. Let us handle your posting compliance with our Labor Law Poster Replacement Solution; to learn more contact your Client Manager (925) 240-2400.