California Minimum Wage Increases on January 1, 2025

By Swerdlow Florence Sanchez Swerdlow & Wimmer

December 20, 2024

On January 1, 2025, California’s minimum wage increases to $16.50 for employers of all sizes. This increase to the California minimum wage results in an increase to the minimum annual salary that employers must pay exempt employees in 2025 in order to continue to properly classify them as exempt. Beginning January 1, 2025, the annual minimum salary for exempt employees, irrespective how many hours they work, will increase from $66,560.00 to be $68,640.00.

Certain professions have different minimum wage requirements, which also increase on January 1, 2025. For example, for computer professionals, whose duties qualify them to be classified as exempt, the minimum rate they must be paid to be exempt from overtime premium pay increases to: $118,657.43 per year; $9,888.13 per month; or $56.97 per hour. And the minimum pay rate for hourly-paid licensed physicians who are exempt from overtime premium will increase to $103.75 per hour. Below are some of the minimum wages applicable to specific industries:

California’s Industry Specific Minimum Wages:

• Non-Exempt Fast-Food Workers: $20.00 per hour (effective April 1, 2024);
• Exempt Fast-Food Workers: $83,200.00 per year (effective April 1, 2024);
• Large Hospitals or Integrated Health Systems: $23.00 per hour (effective January 1, 2025), and increasing to $24.00 per hour June 30, 2025;
• Safety Net Hospitals: $18.00 per hour (effective January 1, 2025) and increasing by 3.5% June 30, 2025;
• Exempt Health Care Workers: 1.5 times the applicable health care minimum wage, or two times the state minimum wage, whichever is greater.

Moreover, some cities have higher minimum wage requirements than California. Here are a few:

Local Minimum Wages:

• City of Los Angeles: $17.28 per hour minimum wage;
• Hotel Workers in the City of Los Angeles: $20.32;
• Santa Monica: $17.27 per hour;
• Hotel Workers in Santa Monica: $20.32 per hour;
• San Diego: $17.25 per hour.

Employers should remain aware of where their remote employees are physically working and ensure that they are complying with all applicable minimum wage requirements.