California minimum wage 2024
Minimum wage laws apply in Los Angeles, San Francisco, and all other cities in California. They are applicable to full-time and part-time work in all industries, from hospitality and food service to advertising and commercial jobs. The rate is mainly determined by the number of employees, though companies can pay subminimum rates in some special circumstances. The state legislatures do not include compensation for overtime pay.
The California minimum wage in 2024 is $16.00. CA Labor Code 1182.12;Â California Department of Industrial Relations.
According to California’s Labor Code, beginning on January 1, 2023, for employers with 26 or more employees and January 1, 2024, for employers with 25 or fewer employees, California will increase its minimum wage by the lesser of:
- 3.5 percent and
- the rate of change in the averages of the most recent July 1 to June 30, inclusive, period over the preceding July 1 to June 30, inclusive, period for the United States Bureau of Labor Statistics nonseasonally adjusted United States Consumer Price Index for Urban Wage Earners and Clerical Workers (U.S. CPI-W) rounded to the nearest ten cents ($0.10).
The California Director of Finance is responsible for determining the change in minimum wage based on the calculations discussed above by August 1 of the year before the change will take place. Additional rules apply that may affect California’s minimum wage calculation. CA Labor Code 1182.12
California employers must also comply with federal minimum wage laws, which currently sets the federal minimum wage at $7.25. See FLSA: Minimum Wage.
If an employer chooses to pay employees minimum wage, the employer must pay those employees in accordance with the minimum wage law, either federal or state, that results in the employees being paid the higher wage. In most instances in California, the California minimum wage will apply as it generally guarantees a higher wage rate for employees than federal law.
Tip minimum wage
California does not have a reduced minimum wage rate for tipped employees. Employers must pay tipped employees the standard minimum wage for all hours worked. CA Labor Code 351; Henning v. IWC, 762 P.2d 442 (CA Sup. Ct. 1988).
All gratuities or tips received by an employee are considered to be the sole property of the employee. Employers may not make any deduction from them, including credit card processing fees. Employers must give employees gratuities paid by credit card no later than the payday following the date the customer paid the gratuities. CA Labor Code 351
The term “gratuity” includes any gratuity, tip, or money that a customer leaves for an employee that is over and above the actual amount owed for services rendered or goods sold. CA Labor Code 350(e)
Tip pooling and sharing
California law permits employers to require employees to pool tips. Avidor v. Sutter’s Place, 212 Cal.App.4th 1439 (2013); Leighton v. Old Heidelberg, Ltd., 219 Cal. App. 3d 1062 (1990); Budrow v. Dave & Buster’s of California, 171 Cal.App.4th 875 (2009).
Tip pooling consists of collecting all or part of tips (gratuities) received by individual employees into a single pool which is then redistributed to employees based on a predetermined set of factors or criteria. Employers may lawfully include employees who both directly and indirectly serve customers in tip pools, e.g. servers, bartenders, bussers, etc. Budrow v. Dave & Buster’s of California, 171 Cal.App.4th 875 (2009). Owners, managers, and supervisors may not participate in tip pools. Budrow v. Dave & Buster’s of California, 171 Cal.App.4th 875 (2009).
Subminimum wage
Employees with disabilities
Beginning January 1, 2022, California minimum wage laws prohibit the issuing of new special licenses to employees to pay employees with disabilities a subminimum wage. Employers who do not have a current special license will be required to pay employees with disabilities the standard minimum wage for all hours worked. CA Bill 639; CA Labor Code 1191
The ability of employers with current special licenses to pay employees with disabilities a subminimum wage will be
The ability of employers with current special licenses to pay employees with disabilities a subminimum wage will be phased out until January 1, 2025, on which date no employer will be permitted to pay employees with disabilities a subminimum wage.
The State Council on Developmental Disabilities, in consultation with stakeholders and relevant state agencies, is required to develop a multi-year phaseout plan by January 1, 2023. Beginning on January 1, 2025, all employers will be required to pay employees with disabilities the standard minimum wage for all hours worked. CA Bill 639.
Trainees
California minimum wage laws permit employers to pay trainees (referred to as learners) a subminimum wage rate that is no less than 85% of the standard minimum wage for the first 160 hours of employment. To qualify, the trainees (learners) must have no previous or related experience in the occupation for which they are hired. CA Labor Code 1192; IWC Orders 1-16: Section 4
Apprentices
California minimum wage laws authorize the Industrial Welfare Commission to establish a subminimum wage rate that may be paid apprentices. CA Labor Code 1192; CA Division of Apprenticeship Standards
Learners
California minimum wage laws authorize the Industrial Welfare Commission to establish a subminimum wage rate that may be paid to learners. CA Labor Code 1192
Student learners
California minimum wage laws do not allow employers to pay student learners less than the standard minimum wage. Employers must pay student learners the standard minimum wage rate unless otherwise exempt.
Student workers
California minimum wage laws allow employers of organized camps to pay student workers no less than 85% of the minimum wage for up to 40-hours per week. CA Labor Code 1182.4
California minimum wage laws do not allow employers to pay any other student workers less than the standard minimum wage, unless otherwise exempt.
California Minimum Wage Laws 2024 FAQs
What is California’s minimum wage?
The California minimum wage in 2024 is $16.00 per hour. The minimum overtime rate in California in 2024 is $24.00 per hour.
Will there be a minimum wage increase in California in 2024?
Yes. It increased its minimum wage for all non-exempt employees to $16.00 per hour.
There are cities and counties within California that also enacted their own minimum wage ordinances. These will increase their employees’ monthly salaries and impact non-exempt and exempt employees.
These hourly wages will also apply for those with full-time employment and even those who will receive an entry-level hourly wage. Indeed, this stricter wage standard has been hugely beneficial for California workers.
Are there minimum wage increases in California in the future?
It is understandable to think that there might not be any increases in California’s hour minimum wage in the future. After all, most of the initiatives coming from other states have a target of hitting a $15 hourly minimum wage, something that California had already achieved this year.
However, there is an effort to apply this larger wage even to those employed by smaller businesses.
How did California achieve a larger wage?
This success was due to the legislation signed into law by former governor Jerry Brown back in 2016. While it will increase workers’ purchasing power and quality of life, it still cannot be overlooked how the rising wage costs led to adverse employment effects.
