Yes, the California minimum wage is going up again.
Effective January 1, 2025, all employers, regardless of size, must pay workers at least $16.50 per hour. The Director of the CA Department of Finance determined and certified that this increase correlates to an increase in the Consumer Price Index of 3.18% based on a comparison of the period from July 1, 2023, to June 30, 2024, and July 1, 2002, to June 30, 2023.
Of course, because the minimum wage is increasing, the minimum salary for “white collar” exempt employees will go up from $66,560 per year to $68,640 per year. Remember, the salary for exempt employees must be a fixed amount, not subject to variation based on the quantity or the quality of the work. So, commissions and bonuses, for instance, cannot be included to meet what is called the “salary basis test.”
In another wrinkle, several municipalities have adopted minimum wages higher than the state’s minimum wage, and many of those hourly rates are increasing as well. Below are the jurisdictions affected and the new rates effective January 1, 2025:
| Belmont: | $18.30 |
| Burlingame: | $17.43 |
| Cupertino: | $17.75 |
| Daly City: | $17.07 |
| East Palo Alto: | $17.45 |
| El Cerrito: | $18.34 |
| Foster City: | $17.40 |
| Half Moon Bay: | $17.47 |
| Hayward: | $17.36 for 26 or more employees |
| $16.50 for 25 or fewer employees | |
| Los Altos: | $18.20 |
| Menlo Park: | $17.10 |
| Mountain View: | $19.20 |
| Novato: | $17.27 for 100 or more employees |
| $17.00 for 26-99 employees | |
| $16.50 for 25 or fewer employees | |
| Oakland: | $16.89 |
| Palo Alto: | $18.20 |
| Petaluma: | $17.97 |
| Redwood: | $18.20 |
| San Carlos: | $17.32 |
| Santa Clara: | $18.20 |
| San Diego: | $17.25 |
| South San Francisco: | $17.70 |
| San Jose: | $17.95 |
| San Mateo: | $17.95 |
| San Mateo County | |
| (unincorporated areas): | $17.46 |
| Sonoma: | $18.02 for 26 or more employees |
| $16.96 for 25 or fewer employees | |
| Sunnyvale: | $19.00 |
| West Hollywood: | $19.65 |
If your employees work in more than one of these locations, you will need to track their time in each place, or pay the highest applicable rate.
