The federal minimum wage in the United States has remained unchanged at $7.25 per hour since 2009, creating a significant disparity as many states, including California, have raised their minimum wage annually in recent years. California, in particular, began implementing steady minimum wage increases in 2017, and this trend has influenced around 20 other states nationwide, many of which have enacted similar legislation or responded to voter initiatives aimed at increasing local wages.
Why Hasn’t the Federal Minimum Wage Increased?
One common question is why the federal minimum wage has not seen any adjustments since 2009. While inflation, cost of living, and economic demands have increased, the federal wage remains stagnant. This gap has encouraged individual states and cities to take action to better meet their residents’ needs. Local and state-led initiatives are often passed either through legislation or by a direct vote from residents seeking a living wage. For more on this, ABC7’s report covers state-level minimum wage changes and the impact on workers’ livelihoods.
California’s Role in Raising Minimum Wages
California has taken one of the most progressive stances on this issue, with gradual yearly increases that are now influencing other states. By setting an example, California has shown that incremental wage growth can be achieved through strategic legislation. As NBC LA reports, California’s minimum wage increases aim to help meet the higher cost of living faced by workers in metropolitan areas like Los Angeles and San Francisco, which often far exceeds the federal baseline.
What Other States Are Following Suit?
Approximately 20 states across the U.S. have now adopted similar minimum wage increases, either through state laws or voter-approved measures. These states include Washington, Massachusetts, and New York, where advocates have successfully lobbied for more substantial wages. Some of these increases are indexed to inflation, meaning they will automatically adjust each year to reflect changes in the cost of living.
How Do Local Minimum Wage Increases Affect Small Businesses?
Local minimum wage increases can have both positive and challenging effects on small businesses. While higher wages support worker retention and can boost local economies, they can also impose additional financial strain on small businesses. Fox11 provides insights into how local minimum wage adjustments impact small business operations, workforce dynamics, and consumer spending.
As the debate around minimum wage continues, it’s clear that state-led efforts play a crucial role in shaping wage policies across the country. By setting new standards, states like California are not only helping to raise the income floor but also providing a model for other regions to follow.
California Minimum Wage Laws in 2024: What You Need to Know
As of January 1, 2025, California has raised its minimum wage to $16.50 per hour for all employees, regardless of the employer’s size. This uniform rate continues to apply to both small businesses and larger corporations, highlighting California’s commitment to fair pay and financial security for its workforce. The updated minimum wage law reflects the state’s ongoing efforts to ensure wages keep pace with economic changes, the rising cost of living, and inflation.
Why Did California Raise the Minimum Wage?
California’s minimum wage has increased to address ongoing economic challenges and the rising cost of living across the state. In 2025, the minimum wage now stands at $16.50 per hour, reflecting the state’s commitment to supporting workers amidst surging housing costs, healthcare expenses, and overall living expenses. This adjustment aims to provide Californians with greater financial stability to meet their basic needs. For more insights on the impacts of minimum wage adjustments in California, explore this article from ABC7.
Who Does the New Minimum Wage Affect?
As of 2025, all hourly workers in California are entitled to a minimum wage of $16.50 per hour, regardless of the size or type of their employer’s business. This statewide standard applies to employees in all industries, including service sectors like restaurants and retail, where wages have traditionally been lower. The unified rate ensures that smaller businesses are held to the same wage requirements as larger corporations, eliminating disparities present in earlier legislation.
Q: What about employees who earn tips?
A: In California, tips cannot be used to meet the minimum wage requirement. As of 2025, all tipped employees are guaranteed a minimum base pay of $16.00 per hour, ensuring compliance with state wage laws.
The Economic Impact of Minimum Wage Increases
Research demonstrates that raising the minimum wage continues to benefit low-income workers and helps reduce poverty rates. A recent study highlights that states with higher minimum wages see a decline in the reliance on public assistance programs, such as food stamps. For more insights into similar studies and updated statistics, visit NBC LA.
As of 2025, California’s minimum wage is set at $16 per hour for most workers, with variations for certain businesses and regions. Economists predict that this increase will bolster local economies by enhancing workers’ purchasing power, fostering greater spending in the community. However, some business owners remain concerned about the potential financial strain, especially in areas with high operating costs. For a deeper exploration of how businesses in California are navigating these changes, Fox11 provides a comprehensive analysis.
Minimum Wage Trends and Future Adjustments
California continues to lead the nation in adapting minimum wage policies to reflect economic conditions and inflation. As of 2025, the statewide minimum wage has increased to $16.50 per hour. This marks a steady rise since 2017, with annual adjustments aimed at ensuring workers can sustain themselves and their families amidst rising costs of living. Economists project that California will maintain its approach of aligning minimum wage increases with inflationary trends to support economic stability and fairness.
Q: Are there any exceptions to the $16.50 minimum wage?
A: Yes, some exceptions still apply. These include specific government-supported employment programs and certain roles for employees with disabilities in regulated sectors. However, these exceptions are carefully monitored to ensure compliance with state and federal guidelines.
2025 County-Specific Minimum Wage Laws in California
California continues to implement varying minimum wage standards across different counties and cities, reflecting local cost-of-living adjustments. In 2025, the statewide minimum wage is $16.00 per hour, but many cities and counties have enacted ordinances mandating even higher rates. For example, the minimum wage in Los Angeles has risen to $18.00 per hour for most businesses. Additionally, several other cities, such as San Francisco and Oakland, have adopted minimum wages exceeding $18.00 per hour, with some surpassing $19.00 to account for rising living costs. These local laws often differentiate based on business size, ensuring fair compensation across the workforce.
| County | Minimum Wage as of January 1st, 2024 |
| Belmont | $17.35 |
| Cupertino | $17.75 |
| Daly City | $16.62 |
| El Cerrito | $17.92 |
| Los Altos | $17.75 |
| Menlo Park | $16.70 |
| Mountain View | $18.75 |
| Novato | $16.86 (for businesses with 100+ employees) |
| $16.60 (for businesses with 26-99 employees) | |
| Oakland | $15.97 |
| Palo Alto | $17.80 |
| Petaluma | $16.00 |
| $17.45 | |
| Redwood City | $17.70 |
| San Diego | $16.85 |
| San Jose | $17.55 |
| San Mateo | $17.35 |
| Santa Clara | $17.75 |
| Sonoma | $17.60 (for businesses with 26 or more employees) |
| $16.56 (for businesses with 1-25 employees) | |
| South San Francisco | $17.25 |
| Sunnyvale | $18.55 |
| County | Minimum Wage as of July 1st, 2024 |
| Alameda | $16.52 |
| Berkeley | $18.07 |
| Emeryville | $18.67 |
| Fremont | $16.00 |
| $16.80 | |
| Los Angeles (City & Unincorporated) | $15.96 |
| $16.78 | |
| Malibu | $16.00 |
| $16.90 | |
| Milpitas | $17.20 |
| Novato | $16.86 (for businesses with 100+ employees) |
| $16.60 (for businesses with 26-99 employees) | |
| $16.00 (1-25 employees) | |
| Pasadena | $16.93(>26 employees) |
| $15.00(1-25 employees) | |
| San Francisco | $18.07 |
| San Leandro | $15.50 |
| Santa Monica | $16.90(>26 employees) |
| $16.00 (1-25 employees) | |
| Santa Rosa | $17.45(>26 employees) |
| $16.00(1-25 employees) |
Current Schedule of Statewide Minimum Wage Increases in California by Year
California has implemented a statewide schedule for increasing the minimum wage, applying uniformly to companies of all sizes since 2023. Here’s the updated breakdown of minimum wage changes over the years:
| Year | ≤ 25 Employees | > 26 Employees |
|---|---|---|
| 2017 | $10.00/hour | $10.50/hour |
| 2018 | $10.50/hour | $11.00/hour |
| 2019 | $11.00/hour | $12.00/hour |
| 2020 | $12.00/hour | $13.00/hour |
| 2021 | $13.00/hour | $14.00/hour |
| 2022 | $14.00/hour | $15.00/hour |
| 2023 | $15.50/hour | $15.50/hour |
| 2024 | $16.00/hour | $16.00/hour |
| 2025 | $16.50/hour | $16.50/hour |
As of 2023, the minimum wage rate in California is the same for all employers, regardless of the number of employees, and future increases are determined by inflation adjustments. The 2025 rate reflects this adjustment, ensuring continued support for workers across the state.
Exceptions to the Minimum Wage Law in California
In California, not all employees are subject to the standard minimum wage law. However, exempt employees must receive a fixed and guaranteed salary. When determining if an employee is exempt, it is the employer’s responsibility to provide evidence of this status.
Exemptions
Certain groups are exempt from California’s minimum wage requirements, including:
- Parents, spouses, or children of the employer.
- External sales teams.
- Indentured apprentices who are legally permitted under the State Division of Apprenticeship Standards.
Additionally, under Labor Codes 1191 and 1191.5, employees with mental or physical disabilities, or organizations employing disabled workers, may qualify for special licenses issued by California’s Division of Labor Standards Enforcement. These licenses allow such employees to work for less than the state minimum wage.
Tipped Employees
Employees who receive tips in California are not subject to a reduced tipped minimum wage as in some other states. Unlike states such as New Mexico ($2.35/hour), Arizona ($9/hour), or Colorado ($8.98/hour), California law requires that tipped workers earn the full state minimum wage plus their tips.
Learners
For workers with no prior experience in a similar field (classified as “learners”), employers are permitted to pay 85% of the state minimum wage for the first 160 hours of work.
As of 2025, California’s minimum wage is $16 per hour for employers with 25 or fewer employees and $17 per hour for employers with 26 or more employees.
For more information on employment laws and worker rights, visit the Heidari Law Group’s Employment Law page.
Exempt Employee Requirements in California
For an employee in California to be considered exempt, they must meet specific requirements set by the state. These include:
- Salary Threshold
An employee must earn a salary of no less than twice the state’s minimum wage for full-time employment. As per the 2025 guidelines, the formula for determining this threshold is twice the state’s minimum wage multiplied by 2,080 (the number of hours in a full-time work year).- For companies with more than 26 employees: The minimum salary in 2025 is $73,280 annually, which equates to $6,106.67 monthly.
- For companies with 26 or fewer employees: The minimum salary is $67,600 annually, which equates to $5,633.33 monthly.
- Duties Test
If an employee spends more than half of their working time performing duties considered exempt, they can qualify as exempt employees. This typically includes roles involving executive, administrative, or professional duties. - Inside Sales Employees
Inside sales employees are considered exempt if they earn more than 150% of the state’s minimum wage and more than 50% of their earnings come from commissions. To satisfy this requirement for exemption in 2025:- For companies with fewer than 26 employees: The employee must earn more than $22.50 per hour.
- For companies with more than 26 employees: The employee must earn more than $24.00 per hour.
California Minimum Wage Frequently Asked Questions
Can Employees for Less Than the Minimum Wage Willingly?
No, employees in California cannot work for less than the state’s minimum wage, even if they agree to the lower pay. This is prohibited under California Civil Code Sections 3513 and 1668. Employers must pay the higher of either the state or federal minimum wage. Since California’s minimum wage is often higher than the federal rate, most employers must comply with the state minimum wage.
As of 2025, the California minimum wage is $16.00 per hour for employers with 25 or fewer employees and $17.00 per hour for employers with 26 or more employees, unless a specific exemption applies.
What Happens When an Employer Pays Less Than the Minimum Wage?
If an employer fails to pay the minimum wage required by law, employees have the right to file a wage claim with the California Labor Commissioner’s Office or file a lawsuit to recover lost wages.
- Filing a Claim: When a wage claim is submitted, the Labor Commissioner’s Office investigates. This may lead to a hearing or dismissal of the claim.
- Court Appeals: Either party can appeal the decision, leading to a court trial where evidence and witnesses are presented.
- Judgments: If the court rules against the employer and they still refuse to pay, the Division of Labor Standards Enforcement (DLSE) can issue a judgment to collect the owed wages.
- Retaliation: Employers are prohibited from retaliating against employees who file wage claims. Retaliation, including termination or harassment, can lead to a separate lawsuit for discrimination or retaliation. If retaliation involves discrimination, consulting a workplace discrimination lawyer may strengthen the case.
Do Tips Count Towards Minimum Wage?
No, tips do not count toward meeting an employer’s obligation to pay the minimum wage. California law prohibits employers from using tips to offset their responsibility to pay the full minimum wage.
Is There Any Difference Between Minimum Wage for Minors or Adults?
No, both minors and adults are entitled to the same minimum wage in California, unless they fall under a specific exemption.
Which Other States are Increasing Their Minimum Wage This Year?
Several states are increasing their minimum wage in 2025, including:
- Alaska
- Arizona
- Arkansas
- Colorado
- Florida
- Illinois
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Missouri
- Montana
- New Jersey
- New Mexico
- New York
- Ohio
- South Dakota
- Vermont
- Washington
Each state has unique timelines and rates for their increases, so employees should refer to their state’s labor office for the latest information.
Contact an Experienced Employment Law Attorney at Heidari Law Group Today
Stay informed about California’s employment laws, including the updated 2025 minimum wage rates. Our seasoned employment law attorneys are here to provide guidance and ensure your rights are protected. Contact us today at 1-833-225-5454 or info@heidarlawgroup.com for a free case evaluation with Heidari Law Group. We proudly serve clients in Los Angeles, Irvine, and Sacramento.
***Disclaimer: This webpage has been crafted by Heidari Law Group solely for educational purposes. The content of this article aims to offer a broad comprehension of the law and does not constitute specific legal advice. By accessing this site and perusing its contents, no attorney-client relationship is established between you and any member of Heidari Law. Additionally, it’s important to note that the legal landscape is subject to continuous change, rendering some of the information provided herein potentially outdated or no longer applicable.
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