Minimum wage is increasing once again in California on January 1st, 2020. Complicating matters, there are over 21 individual minimum wage increases in the state for specific cities, counties and/or municipal areas that employers in those areas must meet. It’s crucial for employers to be informed about their local mandates on top of state and federal requirements to ensure they are providing compliant wages and benefits to all of their employees. Here’s what California employers should know about minimum wage requirements for 2020.
California Statewide Minimum Wage
Minimum wage in California will continue to rise each year on a state-wide basis until it reaches $15.00 an hour; which will occur on January 1st, 2022 for large (25 or more employees) employers and in 2023 for smaller (less than 25 employees) employers.
For 2020, the increases are as follows:
- Minimum wage for small employers in the state will be increasing from $11.00 an hour to $12.00 an hour.
- Minimum wage for large employers will be increasing from $12.00 to $13.00 an hour.
California Local and Municipal Minimum Wage
Making matters exceedingly more complex for employers with multiple worksites throughout the state are the individual local mandates for minimum wage compensation. Many cities, counties and municipal areas have their own set of minimum wage ordinances that are above state and federal levels in order to meet the cost-of-living demands in those areas.
Some of the areas with their own minimum wage ordinances are:
- Long Beach
- Los Angeles
- Palo Alto
- San Diego
- San Francisco
- San Jose
- And more… for a full list of California Minimum Wage Ordinances, download our e-guide, found at the bottom of our resources page.
Beyond the Golden State
The federal minimum wage is not increasing January, 1st, 2020, however, California is not the only state with minimum wage increases that exceed federal requirements. You can get a more detailed look into the minimum wage and local ordinances for your state, including local and county ordinances, when you download our free e-guide.
Minimum Salary Thresholds
Also, on January 1st, 2020, the federal minimum salary threshold for exempt employees will be raised to $35,568 per year, however, California will have its own increase as well.
Effective January 1, 2020, the California threshold for employers of 26 or more employees will increase to $54,080 per year, well above the federal minimum. At the same time, small employers in California with less than 25 employees will need to ensure any exempt employees are making a minimum of $49,920.00 per year.
Now is the best time to review compensation rates for every single employee on your payroll to ensure your wages are in compliance before the January 1st, 2020 deadline arrives. Employers can also partner with a PEO that offers payroll and compliance services to help them remain up to date and compliant with ever changing complex wage and hour laws.
Since 1995, Emplicity has provided a smarter, more secure, and integrated platform of employer services to its 300 business clients and their 8,500 employees. As a Professional Employer Organization, or PEO, the California-based HR outsourcing firm simplifies the compliance, administration, and support businesses need in the areas of employee benefits, payroll, and human resources technology.
NOTICE: Emplicity provides HR advice and recommendations. Information provided by Emplicity is not intended as a substitute for employment law counsel. At no time will Emplicity have the authority or right to make decisions on behalf of its clients.