California Minimum Wage Updates for 2025: What You Need to Know

As we approach 2025, it’s essential for employers in California to stay informed about the upcoming changes to the minimum wage.? Here’s a comprehensive overview of what to expect.

Statewide Minimum Wage Increase

Beginning January 1, 2025, the minimum wage in California will increase to $16.50 per hour for all employers, regardless of size. This adjustment is part of the state’s ongoing efforts to ensure wages keep pace with the cost of living and inflation.? However, in November’s ballot, California voters will decide on Proposition 32, which proposes to raise the state minimum wage to $18 per hour. Here are the proposed changes:

·?????? For employers with 26 or more employees, the minimum wage would increase to $17 per hour for the remainder of 2024 and then to $18 per hour starting January 1, 2025.

·?????? For employers with 25 or fewer employees, the minimum wage would increase to $17 per hour for 2025 and then $18 per hour in 2026.

The measure also includes provisions for annual adjustments based on the cost of living starting in 2027.? This potential increase and how quickly it could change, will have a huge impact on businesses and their ability to maintain operations.? Stay tuned for updates!!

Healthcare Minimum Wage

Healthcare workers in California saw some significant changes to their minimum wage, thanks to recent legislation. Effective October 16, 2024, the minimum wage for healthcare workers will vary based on the type of facility and the size of the employer:

·?????? The health care worker minimum wage has several schedules depending upon the facility type that vary between $18 to $23 per hour that will start October 16, 2024, except for covered county-run health care facilities. These facilities will start implementing the new minimum wage no earlier than January 1, 2025. The Department of Industrial Relations (DIR) has provided an FAQ to assist covered health care facilities found here .

Exemption Salary Basis

As minimum wage changes, so the does the salary basis for exempt employees.? For employees classified as exempt under California law, there are specific salary requirements that must be met. In 2025, the minimum salary for exempt employees will be $68,640 annually (if the state’s minimum wage stays at $16.50 per hour starting January 1st). This figure is calculated as twice the annual earnings of a full-time employee at the minimum wage rate, ensuring that exempt employees receive a salary that reflects their higher level of responsibility and expertise.

Exemption Salary Basis for Computer Software and Licensed Physicians Employees

For 2025, the minimum salary for exempt computer software and licensed physician employees in California has also increased. Effective January 1, 2025, the following rates apply:

Computer Software Employees -

·?????? Hourly Rate: $56.97

·?????? Monthly Salary: $9,888.13

·?????? Annual Salary: $118,657.43

Licensed Physician Employees –

·?????? The minimum hourly rate will increase to $103.75

Implications for Employers

It’s crucial for employers to review and adjust wages and payroll systems to comply with the new minimum wage rates. Employers should also ensure that exempt employees meet the updated salary thresholds to maintain their exempt status.

Staying informed about these changes is vital for maintaining compliance and supporting fair treatment in the workplace, reach out to bizhaven today for support and guidance!