12/12/2018

State and local minimum wages will increase Jan. 1


Many employees in California will begin earning a new hourly minimum wage — the higher of the state or local wage — at the start of the new year.

Beginning Jan. 1, 2019, employers with 25 or fewer employees will pay California’s new minimum wage of $11 and employers with 26 or more employees will begin paying their employees $12. However, if the local minimum wage is higher than the state wage, employers of every size must pay the local minimum wage.

Minimum wages or “living wages” are rising higher and more quickly than the state minimum wage in some California cities and counties. Because the wage increases vary across localities and according to the number of employees, employers should review their individual city ordinances and follow the applicable posting requirements to ensure compliance.

Local minimum-wage increases effective Jan. 1, 2019, are included in the CDA Practice Support resource “Minimum Wage and Paid Sick Leave Ordinances by City” and are listed here alphabetically:

Belmont:

Current: $12.50

Jan. 1: $13.50

Cupertino:

Current: $13.50

Jan. 1: $15

El Cerrito:

Current: $13.60

Jan. 1: $15

Los Altos:

Current: $13.50

Jan. 1: $15

Palo Alto:

Current: $13.50

Jan. 1: $15

Redwood City:

Current: N/A

Jan. 1: $13.50

San Jose:

Current: $13.50

Jan. 1: $15

Santa Clara:

Current: $13

Jan. 1: $15

San Mateo:

Current: $13.50

Jan. 1: $15

Employers with exempt employees should evaluate employee salaries, as exempt employees in California generally must earn a minimum monthly salary of no less than two times the state minimum wage for full-time employment.

The 2019 minimum salary threshold for these exemptions is as follows:

  • For employers with 26 or more employees, the minimum monthly salary test for these exemptions is $4,160 per month ($49,920 per year).
  • For employers with 25 or fewer employees, the minimum monthly salary test is $3,813.33 per month ($45,760 per year).

Again, when paying employees, employers must follow the stricter wage standard — specifically, the one that is the most beneficial to the employee.

Legislation signed into law in 2017 by Gov. Jerry Brown requires California’s minimum hourly wage to rise again by $1 in January 2020 and annually thereafter until it reaches $15. The law does allow the governor to suspend a scheduled wage increase in the event of an economic slowdown (defined as negative job growth combined with negative retail sales for a specified time period) or if a budget deficit is forecasted for the current budget year up to two additional years. 

Some employees, including outside salespersons or the employer’s spouse, child or parent, are exempt from the state minimum wage law.

The new downloadable California Minimum Wage notice will be available by Jan. 1 on the website of the Department of Industrial Relations.

See the CDA Practice Support resource “Minimum Wage and Paid Sick Leave Ordinances by City/County” for local wage increases, including some that take effect in 2020, and links to the individual city references.



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