California state minimum wage: What you need to know

In the United States, minimum wage policies vary significantly from state to state, with some regions setting rates above the federal minimum wage of $7.25 per hour. A noteworthy example is California, one of the states with the highest minimum wage standards in the country.

California workers will receive a substantial raise as minimum wage hits $16 per hour on January 1, 2024. This progressive approach to minimum wage policy aims to address the high cost of living in California, particularly in cities like Los Angeles and San Francisco, where expenses are notably elevated.

Here’s what you need to know about California’s minimum wage:

What is the minimum wage in California?

Starting January 1, 2023, the minimum wage stands at $15.50 per hour across the board. It’s important to note that certain cities and counties have adopted minimum wage rates that exceed the state-level standard.

What is the difference between the local, state and federal minimum wage?

The majority of California employers must adhere to both federal and state minimum wage regulations. Additionally, local jurisdictions, including cities and counties, have the authority to implement their own minimum wage ordinances, often setting higher wage rates for employees within their specific areas of jurisdiction. This results in a diverse landscape of minimum wage standards across the state, with certain cities enacting their own, higher minimum wage rates.

With multiple government sources overseeing minimum wage regulations, the rule of thumb in California is to follow the stricter standard, which ultimately benefits the employee. As a result, when conflicting requirements exist in various laws, employers must adhere to the more stringent standard. In California’s case, the state’s minimum wage rate takes precedence over the federal rate. Furthermore, if a local jurisdiction, such as a city or county, has established a higher minimum wage, employers within that area must pay their employees the local wage, provided it exceeds the state or federal minimum wage rates. This complexity ensures that workers in different parts of California may earn varying minimum wages, reflecting the localized cost of living and economic conditions.

Does employer have to pay minimum wage if they have one employee?

Yes, employers are required to compensate all employees with at least the minimum wage per hour.

Can employee agree to work for less than minimum wage?

No, it is not possible to waive the minimum wage through any agreement, including collective bargaining agreements. The employer must follow the minimum wage requirements, and agreements between employers and employees cannot circumvent any legislative measures enacted to safeguard employees’ rights.

What are the exceptions to hourly minimum wage requirements?

Certain employees are exempt from the minimum wage law, including outside salespersons, individuals who are the employer’s parent, spouse, or child, and apprentices regularly indentured under the State Division of Apprenticeship Standards.

Learners, regardless of age, have an exception allowing them to earn at least 85 percent of the minimum wage rounded to the nearest nickel during their initial 160 hours of employment if they have no previous experience in related occupations.

Furthermore, exceptions apply to employees with mental or physical disabilities, or both, and nonprofit organizations like sheltered workshops or rehabilitation facilities employing disabled workers. Individuals with licenses may renew them, and organizations can obtain a special license from the Division of Labor Standards Enforcement, permitting employment at a wage below the legal minimum wage, but this provision is effective only until January 1, 2025.

What to do if employer does not pay minimum wage?

Employees can submit a wage claim to the Division of Labor Standards Enforcement (the Labor Commissioner’s Office), or they can initiate a lawsuit against the employer in court to seek recovery of the unpaid wages.

What happens after filing wage claim?

Once a wage claim has been completed and submitted to a local Division of Labor Standards Enforcement (DLSE) office, a Deputy Labor Commissioner will handle it. This Commissioner will evaluate the claim and consider the circumstances and information provided to determine the most appropriate course of action. This initial response to the claim could involve scheduling a conference or hearing to address the matter, or it may result in the dismissal of the claim if warranted.

When a decision is made to conduct a conference, both parties involved will receive official notification by mail specifying the date, time, and location of the conference. The primary objective of this conference is to assess the validity of the claim and explore the potential for a resolution without the need for a formal hearing. If the conference doesn’t lead to a resolution of the claim, the typical next step involves either referring the matter to a formal hearing or dismissing it due to insufficient evidence.

During the hearing, all relevant parties and witnesses will testify under oath, with recording of the proceedings. After the hearing concludes, the Labor Commissioner will issue an Order, Decision, or Award (ODA), which will be provided to both parties.

It’s essential to note that either party has the right to appeal the ODA to a civil court that possesses the appropriate jurisdiction. The court will then schedule a trial, affording each party the opportunity to present their evidence and witnesses. Importantly, the court’s decision will not rely on the evidence and testimony presented during the Labor Commissioner’s hearing. In cases where the employer initiates the appeal, the Division of Labor Standards Enforcement (DLSE) may provide legal representation for an employee who lacks the financial means.

Source: DIR