Effective January 1, 2023, California employers will be required to meet new minimum wage requirements, at both the state and local level. This increase in the minimum wage affects not only non-exempt employees, but also the minimum annual salary requirement for overtime exempt employees.
Increase and Consolidation of the California Minimum Wage
Previously, the State of California employed a two-tiered minimum wage system, requiring employers with 25 or more employees to pay a higher minimum wage than employers with fewer than 25 employees. Beginning on January 1, 2023, all employers, regardless of size, must provide their employees a minimum wage of not less than $15.50 per hour.
Increase to the Minimum Annual Salary for Overtime-Exempt Employees
California law provides that overtime-exempt employees must receive a salary that is not less than two times the state minimum wage. In light of the new increase to the state minimum wage, effective January 1, 2023, the minimum annual salary for overtime-exempt employees will also increase to $64,480.
A Higher Minimum Wage for Employees Working in Select California Cities
Select California cities will raise the minimum wage for non-exempt employees working within city limits. Non-exempt employees working within one of these cities must be paid the local minimum wage when greater than the California state minimum wage. However, overtime-exempt employees working in one of these cities need not be paid more than the California state minimum annual salary of $64,480. The following list contains the local minimum wage rate, effective January 1, 2023, for non-exempt employees working in each of the California cities listed below:
| Jurisdiction | Minimum Wage Rate |
| Belmont | $16.75/hour |
| Burlingame | $16.47/hour |
| Cupertino | $17.20/hour |
| Daly City | $16.07/hour |
| East Palo Alto | $16.50/hour |
| El Cerrito | $17.35/hour |
| Foster City | $16.50/hour |
| Half Moon Bay | $16.45/hour |
| Hayward |
$16.34/hour (26 or more employees) $15.50/hour (1-25 employees) |
| Los Altos | $17.20/hour |
| Menlo Park | $16.20/hour |
| Mountain View | $18.15/hour |
| Novato |
$16.32/hour (100 or more employees, including people employed outside the city) $16.07/hour (26-99 employees) $15.53/hour (1-25 employees) |
| Oakland | $15.97/hour |
| Palo Alto | $17.25/hour |
| Petaluma | $17.06/hour |
| Redwood City | $17.00/hour |
| Richmond | $16.17/hour |
| San Carlos | $16.32/hour |
| San Diego | $16.30/hour |
| South San Francisco | $16.70/hour |
| San Jose | $17.00/hour |
| San Leandro | Current $15.00/hour rate expected to increase on 1/1/23, as it will be below the state minimum wage. |
| San Mateo | $16.75/hour |
| Santa Clara | $17.20/hour |
| Santa Rosa | $17.06/hour |
| Sonoma |
$17.00/hour (26 or more employees, including those working outside the city) $16.00/hour (1-25 employees) |
| Sunnyvale | $17.95/hour |
| West Hollywood |
$17.50/hour (50 or more employees) $17/hour (1-49 employees) |
California employers should work with their payroll providers to
increase the relevant minimum wage for affected exempt and
non-exempt employees, and ensure that the new rate is paid and
properly recorded on employee pay stubs by January 1, 2023.
California Minimum Wage Increases For 2023
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
