As of January 1, 2025, an employee must receive a minimum wage of $684 per week, or $35,568 annually, in order to qualify as an exempt employee in the United States. Comparison to, California’s exempt employees are required to get at least double the state minimum wage. Minimum wage in California 2025 will be $16.50 per hour. This indicates that California state law gives exempt employees a larger wage base than what federal law allows.
The minimum wage rates set by local counties or cities that differ from and are higher than the state rate should also be known by employers. The employer is required to pay the higher local minimum wage rate if it is greater than the state minimum wage. Effective January 1, 2025, several cities will raise the minimum wage rates for specific employees, as shown in the chart below. (In July 2024, several areas raised the minimum wage rate; in July 2025, they will do so once more.)
Minimum wage in California
California’s state minimum wage has been increased to USD 16.50 per hour for all employers on January 1, 2025. As previously mentioned, California voters turned down Proposition 32, that proposed a gradual rise in the minimum wage. Except in a few specific cases, all employees are paid the minimum wage of $16.50.
So to satisfy the threshold requirement, California’s exempt employees, who are required to make at least twice the state minimum wage, must now obtain an annual income of at least $68,640, or $1,320 per week. The Wage Order that applies to their workplace and the updated Minimum Wage Order should be posted by employers. The wage orders are available for download and printing via workplace postings page on official website of DIR.
These employees are exempted under this
In California, employees who make more than double the minimum wage are considered employees who are exempted under this. To achieve this minimal criteria, they must now receive a wage of at least $68,640 year, or $1,320 each week. The California Department of Industrial Relations (DIR) website’s workplace postings page offers wage orders for download and printing. Outside salesmen, parents, spouses, or children of the employer, as well as apprentices regularly engaged under the State Division of Apprenticeship Standards, are among the employees who are excluded from the minimum wage law.
Additionally, charitable organizations like sheltered workshops or rehabilitation facilities that employ handicapped employees, as well as employees with physical or mental disability, or both, are exempt. In the state of California, the income table varies by city and town. To ascertain the price of their goods and be able to provide deposits to their employees on time, all firms must modify their minimum wage payroll budget.
Industry-Specific Laws
Employers should be mindful of the shifting minimum salaries for certain industries in addition to the state’s general minimum wage increase.
Fast food employees
As we know that on April 1, 2024, MW for employees at major fast food chain, as a group of limited-service restaurants with many locations nationwide increased to $20 per hour. The yearly minimum wage for fast food employees is set by the Fast Food Council, which has the authority to raise it by either 3.5% or the Consumer Price Index rise, whichever is less. In addition, the Council has the authority to set a minimum wage for the entire state or to set different minimum wages for different regions.
The Council has not made an announcement till, although it is still discussing more wage increases for 2025. Please note that the rule does not apply to bakeries that make bread on-site and sell it as a separate menu item or to restaurants in supermarkets if the employees of the on-site restaurant are directly employed by the supermarket.
Healthcare workers
On October 16, 2024, increases in the minimum wage for California health care professionals became operative. Additionally, the new legislation requires that salaried workers of covered firms get a monthly compensation that is at least 150% of the health care minimum wage or 200% of the ordinarily relevant minimum pay, whichever is higher. Following the passage of Senate Bill 525, the change was initially scheduled to go into effect this past June.
Budgetary concerns, however, caused Senate Bill 159 to postpone implementation. Working for a “health care facility” that is covered by the new law and offering healthcare services or assisting with the provision of healthcare is a requirement for eligibility for the minimum wage rise. Only the hikes for county-run covered healthcare institutions will be implemented on January 1, 2025. On July 1, 2025, increases are expected to take effect for further categories of covered employers.
What impact does the minimum wage in California have on my salary?
The minimum hourly pay for non-exempt employees in California is the basis for the minimum compensation for exempt employees in that state. Exempt employees must receive at least twice the minimum hourly salary required for full-time work. 40 hours a week is regarded as full-time job, and so the current relevant minimum wage is used to determine the minimal compensation level for an exempt employee. Throughout the next years, California is expected to raise the state minimum wage. Additionally, there are differences between big and small employers:
| Effective Date | MW for Employers with 25 or lesser Employees | MW for Employers with 26 or More Employees |
| January 1, 2020 | $12.00 / hour | $13.00 / hour |
| January 1, 2021 | $13.00 / hour | $14.00 / hour |
| January 1, 2022 | $14.00 / hour | $15.00 / hour |
| January 1, 2023 | $15.50 / hour | $15.50 / hour |
| January 1, 2024 | $16.00 / hour | $16.00 / hour |
| January 1, 2025 | $16.50 / hour | $16.50 / hour |
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Samarth Choudhary is a Chief Editor at keralacobank.com. He has overall editorial experience of 10 years in online media. He has completed his graduation from University of California and masters in Finance from University of Dallas in year 2010. His major interest and expertise is in Finance, Taxes, Government Aid and Schemes. His Major focus is to help users to get relevant information which are published on keralacobank.com in easy and precise form.