Within the California minimum wage increase law enacted in 2016 was a provision many skipped past and was, therefore, not discussed much. That provision was to further increase the minimum wage whenever needed to adjust to inflation. Though the consumer price index (CPI) increased by 7.9% so far this year, the minimum wage increase is capped at 3.5% by law. The determination by the Department of Finance was to thus increase the minimum wage to $15.50/hour in California starting January 1st, 2023, for all organizations, regardless of size. If you have any minimum wage workers, please be sure to adjust their pay accordingly. If you have employees working in an area that has its own local minimum wages, be mindful that these will likely also increase.
Important Note:
Because the minimum salary to qualify for the executive, administrative, and professional employee exemption is tied to the state’s minimum wage, the minimum salary a person must earn to continue being considered exempt (non-hourly) will also increase by $2,080 to $64,480. These salaries will need to be adjusted as well for any exempt employees who fall below this threshold.
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