On January 1, 2021, the California minimum wage increased to $14.00 per hour for employers with at least 26 employees and $13.00 per hour for smaller employers. The state minimum wage also governs the exempt employee threshold salary, which has increased accordingly. The new minimum salary for employees who otherwise qualify to be exempt from overtime is $58,240 annually for employers with at least 26 employees and $54,080 annually for employers with fewer than 26 employees. 

Further, several California municipalities will raise their minimum wage rates on July 1, 2021. Employers should take care to note these changes because the pace of minimum wage increases in these locations will surpass increases required by the State of California in the race to reach a minimum wage of $15.00 per hour.

For example, in the City of Los Angeles, Santa Monica, Malibu, unincorporated Los Angeles County and Pasadena, the minimum wage is currently $15.00 for employers with 26+ employees and is $14.25 for employers with 25 or fewer employers. On July 1, 2021, in these locations, minimum wage will remain at $15.00 for employers with 26+ employees and increase to $15.00 for those with 25 or fewer employees.

In determining whether a given increase applies, employers should know that it is not where an employee lives or where an employer is based that determines the minimum wage that must be paid. Rather, it is where the employee works that determines the minimum wage requirement that will be applied. In many municipalities, if an employee works as few as two hours in the city in a week, that municipality’s minimum wage applies to the time worked there for that week.

The author would like to gratefully acknowledge the assistance of Joanne Warriner.