CALIFORNIA – California’s minimum wage is set to rise to $16.50 per hour statewide starting January 1, 2025, marking a 50-cent increase from the current rate of $16 per hour. The adjustment is tied to inflation and comes after Proposition 32 failed to pass, which aimed to raise the minimum wage to $18 per hour.
Wage Increase Tied to Inflation
The increase results from California’s annual wage review based on the U.S. Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The Department of Finance calculated that the average CPI-W for the 12 months from July 1, 2023, to June 30, 2024, rose by 3.18% compared to the prior year.
Under state law, these annual reviews ensure wages keep pace with rising costs, providing relief for workers facing higher living expenses.
Additionally, the minimum salary for exempt-status employees will increase in 2025. Employees classified as exempt will see their minimum salary rise from $66,560 annually ($1,280 per week) to $68,640 annually ($1,320 per week).
Fast-food and Healthcare Sector Wages
Specific industries in California have their wage requirements:
- Fast-Food Workers:
A state law that took effect this year mandates fast-food employees be paid a minimum wage of $20 per hour. The California Fast Food Council has the authority to raise this wage starting January 1, 2025, but has not yet announced any changes. - Healthcare Workers:
Healthcare employees must currently be paid a minimum of $23 per hour through June 30, 2025. The wage will increase to $24 per hour on July 1, 2025, and reach $25 per hour on July 1, 2026.
Local Minimum Wage Increases Across California
In addition to the statewide increase, many California cities and counties will implement their own minimum wage hikes starting January 1, 2025. Here are some notable changes:
- Mountain View: $19.20 per hour
- Sunnyvale: $19.00 per hour
- West Hollywood: $19.65 per hour
- El Cerrito: $18.34 per hour
- Cupertino, Los Altos, Palo Alto, Santa Clara, Redwood City: $18.20 per hour
- Oakland: $16.98 per hour
- San Diego (City): $17.25 per hour
- San Jose and San Mateo (City): $17.95 per hour
Some cities differentiate their rates based on employer size. For instance:
- Novato:
- Large employers (100+ employees): $17.27 per hour
- Medium employers (26–99 employees): $17.00 per hour
- Small employers (1–25 employees): $16.50 per hour (matching the state minimum wage).
- Sonoma:
- Large employers (26+ employees): $18.02 per hour
- Small employers (25 or fewer employees): $16.96 per hour.
Filing a Complaint for Unpaid Wages
State law mandates that most California workers be paid at least the minimum wage. Employees who are not receiving proper compensation can file a complaint with the Labor Commissioner’s Office to recover unpaid wages.
Workers can also consult the state’s online resources or contact local labor offices for further assistance.
Impact on Workers and Employers
The wage increase reflects California’s commitment to addressing the rising cost of living. For workers, it provides a modest financial boost, particularly in industries such as hospitality, retail, and service. However, small business owners may face added challenges adjusting to the higher wage requirements.
With local rates surpassing the state minimum in many areas, California workers continue to benefit from some of the nation’s highest wage protections, ensuring greater economic security in an era of inflation.