HR Hot Topic – Minimum Wage Increase

STATE MINIMUM WAGE INCREASE – 01/01/2021

What you need to know
The State of California will implement the next phase of minimum wage increases.

Beginning on 01/01/2021 the state minimum wage will increase for those employers that have 25 or fewer employees.

The schedule is as follows for employers with 25 or fewer employees:

• • On January 1, 2021, the minimum wage will increase to $13 per hour.
  • On January 1, 2022, the minimum wage will increase to $14 per hour.
  • On January 1, 2023, the minimum wage will increase to $15 per hour.

Also beginning on 01/01/2021 the state minimum wage will increase for those employers that have 26 or more employees.

The schedule is as follows for employers with 26 or more employees:

• • On January 1, 2021, the minimum wage will increase to $14 per hour.
  • On January 1, 2022, the minimum wage will increase to $15 per hour.

Salaried Employees Affected

• • The minimum salary threshold for the administrative, executive and professional exemptions is $54,080 annually for employers with 25 or fewer employees.
  • The minimum salary rate is $58,240 annually for employers with 26 or more employees.

Action Required
For those that have 25 or fewer employees, hourly wages must meet the minimum wage of $13.00 per hour and salaries for exempt employees must meet the annual minimum of $54,080.

For those that have 26 or more employees, hourly wages must meet the minimum wage of $14.00 per hour and salaries for exempt employees must meet the annual minimum of $58,240.

Be Aware
Certain cities have adopted a minimum wage that exceeds the California minimum.  Employers that fall under such a local minimum wage ordinance are advised to review the requirements.