It is already December, and 2025 is just around the corner! The Tressler Labor and Employment Group would like to remind all employers of the changes in law coming into effect on January 1, 2025. This post will be the first of three reminder blog posts for California employers.
Minimum Wage
Based on the consumer price index, the state-mandated minimum wage for all California employers will increase from $16.00 per hour to $16.50 per hour starting January 1, 2025. California Minimum Wage MW-2023. This increase in California minimum wage does not affect those cities and localities with local minimum wage ordinances with minimum wages higher than $16.50. This increase in minimum wage also will not affect industry-specific minimum wage ordinances. For example, starting April 1, 2024, fast food employees were given a $20.00 per hour minimum wage. Fast food workers will still maintain a $20.00 per hour minimum wage on January 1, 2025, unless the California Fast Food Council raises the fast food minimum wage.
Healthcare industry employers also may be subject to a higher minimum wage than $16.50. Per SB 525 (2023) and subsequent California Department of Health Care Services action, healthcare workers started receiving increased minimum wages from October 16, 2024. Although these increased wages will not change on January 1, 2025, the healthcare minimum wage will increase in June and July 2025.
With the increase in California minimum wage comes an adjustment in overtime-exempt employee salary calculations. The fifty-cent increase moves the minimum salary test for the primary overtime exemptions (administrative, executive, professional) to $68,640 annually or $5,720 monthly. Employers must pay their employees who are qualified under these exemptions a salary of at least $68,640 annually or $5,720 monthly starting on January 1, 2025. Exempt employees will lose their exempt qualification if they do not receive at least the minimum salary. California employers should check the salaries of their exempt employees to ensure compliance.
All companies in California are encouraged to consult with a member of Tressler’s Employment Law practice group to ensure that their policies are compliant with California’s minimum wage laws. Tressler’s Employment Law practice group has significant experience in ensuring that companies comply with state and federal labor regulations, including California wage and hour policies. If you have any questions or would just like to talk, please contact Bicvan Brown at bbrown@tresslerllp.com.
Jihoon Kim is an associate in Tressler’s Labor & Employment Practice Group in the Orange County office. He advises employers in management-side labor and employment litigation involving discrimination, harassment and wage and hour claims. Having also established and managed corporate human resource departments, Jihoon has drafted and reviewed personnel policies, employee handbooks and other employment-related materials and has conducted investigations and counseled employers in connection with a broad array of employee relations issues, including wage and hour, disability leave and harassment.