Menu
Business owners, organizations and corporations must stay updated and compliant with minimum wages in California to avoid any legal issues. Staying aware and updated helps to plan better for the future of business. Minimum wages in California are closely linked to the cost of living and inflation rate in California so everyone can afford a standard of living. These minimum wages increase annually based on the inflation rate in the economy and measured by the Consumer Price Index.Â
The minimum wage for all employees paid on an hourly basis is $16 per hour irrespective of company size. This rate is applicable starting from January 1, 2024. Till January 2023, it was set at $15.50 per hour. For exempted employees of California, it is set at $66,560 per year. These minimum wages may vary in some cities of California. Although the minimum wage in California is $16 per hour whereas the federal minimum wage is set at $7.25 per hour. For NPOs (Non-profit organizations) there are certain exemptions in minimum wages. For healthcare workers or automotive industry workers, the minimum wages may be high. The tip provided by the customer to the employees goes to that employee. The employer has no right to take any share from the tip of the employee. This practice is completely illegal in California. Â
The minimum wage rate may vary from city to city in California due to the high cost of living. The different cities have different wage rates as compared to the state minimum wage of $16 per hour to adjust the cost of living. Major cities like San Francisco, and Los Angeles have the highest minimum wages to afford standard lifestyles in these cities. The concept of minimum wages allows everyone to earn a livable wage and reduces income inequalities. The minimum wage for San Francisco is $18.07 per hour and for Los Angeles is $16.78 per hour.Â
All those employees who work for 40 hours per week or 5 business days are considered full-time employees in California. As per the Affordable Care Act (ACC), those employers who employ 50 or more employees are the ones who are considered for benefits in California. Employers are the sole decision makers to decide whether they have to call employees who work for less than 40 hours per week.
In California, the minimum wage rate is revised as per the inflation rate of the state. Big businesses and corporations can tackle the rise in minimum wages but it becomes difficult for small business owners to tackle the rising minimum wage of employees.
To tackle the rising wages here are some ways they can consider:
1. Right hiring- It is necessary to ensure that small businesses hire make the right hiring decisions. Replacing an employee costs a lot for the employer. Before hiring make sure that the employee is a good fit for your business. After completing the onboarding process it is necessary to maintain healthy relationships. Moreover, it is necessary to provide a clear path of growth and success to the employees so that they are likely to stay long with your business.
Â
2. Increase the price of product/service- One of the other ways to tackle the rising minimum wage is to increase the price of the product/service in which the business deals. But it’s necessary to stay with the market trends and the rise should be optimal.
Â
3. Recheck your expenses- Before making hiring decisions it’s necessary to recheck the financial statements of the business. Sometimes hiring temporary or contractual employees proves to be less costly as compared to hiring full-time employees.
Â
Using the above methods small businesses can tackle the increase in minimum wages.Â
The minimum wage in California in 2024 is $16 per hour.
San Francisco is one of the states with highest minimum wage of $18.07 per hour.
Full-time high school students and part-time college students are paid a minimum wage of $13.60 per hour.