California’s Minimum Wage Increases on January 1, 2024

On January 1, 2024, California's state minimum wage will increase to $16 per hour for all employers. 

This minimum wage rate applies to all employees, subject to a few limited exceptions. Correspondingly, exempt employees in California must earn no less than two times the state's minimum wage, or an annual salary of no less than $66,560 (or $1,280 per week) to meet this threshold requirement. Employers should post the Minimum Wage Order and the Wage Order applicable to their workplace at a worksite area accessible to employees. The wage orders can be downloaded and printed from the workplace postings page on the California Department of Industrial Relations (DIR) website here.

Industry-Specific Laws

In addition to the general minimum wage increase, this year, Governor Gavin Newsom approved laws changing minimum wage for certain sectors that go into effect later in 2024, including:

• Fast food. As initially described here and here, fast food workers at national fast food chains (defined as a set of limited-service restaurants consisting of more than 60 establishments nationally) must be paid a minimum of $20 per hour, effective April 1, 2024. This law does not apply to bakeries that produce for sale on the establishment's premises bread and sell bread as a stand-alone menu item or restaurants in grocery establishments where the grocery establishment directly employs the staff of an on-premises restaurant.
• Healthcare. As initially described here and here, effective June 1, 2024, California's healthcare workers must be paid according to separate minimum wage schedules for covered healthcare employees, as defined, depending on the nature of the employer. The law sets forth detailed descriptions of which types of healthcare facilities are covered and which employees are covered by the law, and the minimum wage requirement ranges from $18 per hour to $23 per hour. The law also sets forth requirements for salary-based employees providing that they are to earn a monthly salary equivalent to no less than 150% of the healthcare worker minimum wage or 200% of the applicable minimum wage, whichever is greater.

Minimum Wage Increases for Certain Localities

Employers should determine whether their city or county maintains minimum wage rates for nonexempt employees separate from and above the state rate. If a locality provides a higher minimum wage rate than the state rate, the employer must pay the higher local wage rate. As indicated in the chart below, certain localities (in bolded text) will increase their minimum wage rates for certain employees effective January 1, 2024. (Some localities increased the minimum wage rate in July 2023 and will do so again in July 2024).