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California Minimum Wage Increase

The California minimum wage is currently $15.00 per hour for employers with 25 or more employees and $14.00 per hour for those with less than 25 employees.  The minimum wage is expected to increase to at least $15.50 for all employers on January 1, 2023.

Under current law, if inflation exceeds 7% between the 2021 and 2022 fiscal years, a minimum wage increase is triggered.  Currently, inflation is expected to be 7.6% higher from the previous year, triggering the increase.

Additionally, employers should be aware that a minimum wage initiative is expected to be on the November ballot in California.  It proposes to increase minimum wage to $16.00 per hour on January 1, 2023 and to increase annually until it reaches $18.00 per hour in 2028.

Employers should prepare for this increase by adjusting their pay scales.  This includes ensuring that all salary scales tied to the minimum wage, including the salary basis test for the executive, administrative, and professional exemptions, are also adjusted upward or employees are reclassified as non-exempt.