Beginning January 1, 2018, the new California minimum wage rate for employers with 26 or more employees will be $11.00 per hour and the new California minimum wage rate for employers with 25 or fewer employees will be $10.50 per hour.

As we previously reported, effective January 1, 2017, the California state minimum wage began increasing yearly through January 1, 2022 for employers employing 26 or more employees. Effective January 1, 2018, the California state minimum wage will begin increasing yearly through January 1, 2023 for employers employing 25 or fewer employees.

Please note that some employees are exempt from minimum wage laws and there are also certain exceptions to these minimum wage requirements. Employers should check with their legal counsel to ensure that they are appropriately applying these exemptions/exceptions.

Also, as a reminder, in California many exempt employees must be paid a salary of at least twice the minimum wage, so the increase in the state minimum wage may impact exempt employees as well.

Local Jurisdictions with Higher Minimum Wage Rate Increases For The New Year

In addition, several local municipalities within California have set even higher minimum wage rates for employees within their boundaries that will take effect as of January 1, 2018. A list of several of those municipalities with increasing rates is as follows:

    • Cupertino: $13.50/hour
    • El Cerrito: $13.60/hour
    • Los Altos: $13.50/hour
    • Milpitas: $12.00/hour
    • Mountain View: $15.00/hour
    • Oakland: $13.23/hour
    • Palo Alto: $13.50/hour
    • Richmond: $13.41/hour
    • Sacramento: $11.00/hour
    • San Jose: $13.50/hour
    • San Mateo: $13.50/hour
    • Santa Clara: $13.00/hour
    • Sunnyvale: $15.00/hour

Certain exemptions and exceptions may also apply to these minimum wage rate increases and the increases may only apply to certain employers. Also, several other municipalities may have minimum wage rates in effect that are already above the state mandated minimum wage rates listed above and many municipalities have additional minimum wage rate increases that will take effect later in 2018 or in the following years. Legal counsel should be consulted to ensure that employers are following the appropriate municipality minimum wage rates in California.

Still other states, and municipalities within those states, also have their own minimum wage rates that may vary from the federal standards. Once again, employers should consult with legal counsel to ensure that the appropriate wage rates outside of California are being followed.