Changes in The Minimum Wage in California

Minimum Hourly Rates and Salary Requirement to Qualify as ‘Exempt’ Increase

As every business and individual have been subjected to inflationary pressures and rising costs of goods and services of all types, now, effective July 1, 2022, various municipalities across California have increased their minimum wage under their local minimum wage ordinances. The amount of the wage rate increase varies by city and county, and some municipalities distinguish between “large” and “small” employers.  Employers in the following Southern California jurisdictions should review their pay rates for compliance with the new minimum wage rates, effective July 1, 2022 (effective January 1, 2023 for California).

• City of Long Beach: For hotels with 100 or more rooms, the minimum wage will increase from $15.69 to $16.73. For concessionaire workers, the minimum wage will increase from $15.32 to $16.55.
• City of Los Angeles: From $15.00 to $16.04. For hotels with 150 or more guest rooms only, the minimum wage increases from $17.64 to $18.17.
• County of Los Angeles (Unincorporated Areas Only): From $15.00 to $15.96.
• City of Malibu: From $15.00 to $15.96.
• City of Pasadena: From $15.00 to $16.11.
• City of Santa Monica: From $15.00 to $15.96. For hotels only, the minimum wage increases from $17.64 to $18.17.
• City of West Hollywood: For small businesses (less than 50 employees), the minimum wage increases from $15.00 to $16.00. For large businesses (50 or more employees), the minimum wage will increase from $15.50 to $16.50.  For hotels, regardless of size, the minimum wage increases from $17.64 to $18.35.  (Editor’s Note: Minimum wage policies like the City of West Hollywood’s, while admirable trying to ‘give a break’ to smaller businesses, these small businesses become less desirable to potential workers than larger employers unless the smaller businesses are willing to match the minimum wage rate imposed on the larger businesses.)
• State of California – Minimum Wage and Requirement for ‘Exempt’ Employees (e.g., Salaried): There is a new, California minimum salary requirement for ‘exempt’ employees and new state mandated minimum hourly wages to be effective on January 1, 2023.  On May 12, 2022, Governor Gavin Newsom announced that the California minimum wage for all employers in the state will be increased to $15.50 on January 1, 2023, which is a $0.50 cent increase from the original plan to increase the minimum wage to $15.00.  Accordingly, any employees classified as “exempt” (e.g., meaning ‘exempt from overtime’ and on salary) must be paid a salary of at least twice the California State Minimum Wage.  Therefore, all employers, regardless of the number of employees they have, must pay a minimum salary of at least $64,480 in order for their employee to be properly categorized as ‘exempt.’  Local minimum wage ordinances (e.g., any county or city) have no bearing on the minimum ‘exempt’ amount under state law.