Minimum Wage Updates in California for 2025
As the new year approaches, the State of California and many local jurisdictions are implementing their own local minimum wage increases. Employers across the state should carefully review the minimum wage rates in effect in the jurisdictions where their employees work and make any necessary adjustments to take effect for any services performed on or after January 1, 2025.
California Minimum Wage
Starting January 1, 2025, California’s statewide minimum wage will increase to **$16.50 per hour **for all employers, regardless of size.
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Updated (higher) rates are also in effect for qualified computer professionals:
o Hourly rate: $56.97
o Monthly salary: $9888.13
o Annualized Salary: $118,657.43
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Updated (higher) minimum rate of pay for qualified licensed physicians: $103.75/ hr.
Employers should also prepare for certain statewide industry specific minimum wages:
- Fast Food Employee Minimum Wage Law ( $20.00/ hr. effective April 1, 2024 and increasing on January 1, 2025 TBD)
- Health Care Worker Minimum Wage Law ($23.00/ hr. effective October 16, 2024; going to $24.00/hr. effective July 1, 2025)
Exemption Salary Threshold Adjustments
The statewide minimum wage, not local rates, is used to determine the salary threshold for overtime exemptions for administrative, executive, and professional employees that qualify for those exemptions on account of their duties. Beginning January 1, 2025, the minimum salary threshold will rise to $68,640 annually (two times the state minimum wage). Note that new wage schedules for fast food and health care workers impact exemption thresholds for overtime exempt employees working in those industries.
Local Minimum Wages
State and federal law allow municipalities to set even higher minimum wages for employees who perform services in their jurisdictions. Below is a breakdown of updated local minimum wage rates effective January 1, 2025:
Belmont: $18.30 per hour
Burlingame: $17.43 per hour
Cupertino: $18.20 per hour
Daly City: $17.07 per hour
East Palo Alto: $17.45 per hour
El Cerrito: $18.34 per hour
Foster City: $17.40 per hour
Half Moon Bay: $17.47 per hour
Hayward:
- $17.36 per hour for employers with 26+ employees
- $16.50 per hour for employers with 25 or fewer employees (per state law)
Los Altos: $18.20 per hour
Los Angeles: $17.28 per hour
Menlo Park: $17.10 per hour
Mountain View: $19.20 per hour
Novato:
- $17.27 per hour for employers with 100+ employees
- $17.00 per hour for employers with 26–99 employees
- $16.42 per hour for employers with 1–25 employees (but small employers must comply with California’s higher state minimum wage rate of $16.50 per hour)
Oakland: $16.98 per hour
Palo Alto: $18.20 per hour
Petaluma: $17.97 per hour
Redwood City: $18.20 per hour
Richmond: $17.77 per hour
San Carlos: $17.32 per hour
San Diego (city): $17.25 per hour
San Jose: $17.95 per hour
San Mateo (city): $17.95 per hour
San Mateo County: $17.46 per hour
Santa Clara: $18.20 per hour
Santa Rosa: TBD
Sonoma (city):
- $18.02 per hour for employers with 26+ employees
- $16.96 per hour for employers with 25 or fewer employees
South San Francisco: $17.70 per hour
Sunnyvale: $19.00 per hour
West Hollywood: $19.65 per hour
In addition, certain municipalities have established a hospitality industry-specific higher minimum wage rate for covered non-union employees working in the hospitality industry (as defined) and for unionized workers where their union contract does not contain a waiver of this higher minimum wage.
Oakland: $18.36 effective January 1, 2025
City of Santa Monica: $20.32 effective July 1, 2025; will increase July 1. 2025)
City of West Hollywood: $19.61 effective July 1, 2024; will increase July 1, 2025
City of Los Angeles: $20.32
o $22.50 an hour on July 1, 2025 (+ $8.35 per hour for healthcare)
o $25.00 an hour on July 1, 2026
o $27.50 an hour on July 1, 2027
o $30.00 an hour on July 1, 2028
Compliance Reminder
Each local ordinance includes specific requirements for:
Notice and Posting: Updated wage posters must be displayed in a prominent location, such as a break room, and provided to remote employees.
Recordkeeping: Employers must maintain accurate records to demonstrate compliance.
Failure to meet these requirements may result in fines, penalties, or civil action. In addition, under California law, failure to pay minimum wage or applicable overtime pay is a crime (i.e., a misdemeanor).
Action Steps for Employers
If your business operates in any of the listed jurisdictions, ensure compliance by:
- Updating payroll systems to reflect new minimum wage rates.
- Displaying updated posters in conspicuous locations.
- Providing physical copies of notices to remote employees.
- Reviewing and adjusting exempt employee salaries to reflect the new minimum.
As always, if you have any questions about the matters discussed in this issue of Compliance Matters, please call your firm contact at (818) 508-3700 or visit us online at www.brgslaw.com .
Sincerely,