California's Department of Finance certified a minimum wage increase from $16 per hour to $16.50 per hour, beginning January 1, 2025. This determination will apply to most California employers regardless of size, that don't have special wages for their industry or localities.

Why was this CA minimum wage increase implemented?

The California Director of Finance analyzes inflation annually via a U.S. Consumer Price Index (CPI) and determines whether or not to adjust California's minimum wage accordingly. Per California's Labor Code, it's either increased by 3.5 percent or the actual rate of change per CPI, whichever is less.

Joe Stephenshaw, California Finance Director, certified the latter option, a 3.18 percent increase in accordance with the department's CPI calculations.

How does this minimum wage increase affect full-time exempt employees?

This increase also affects the minimum salary requirements for full-time exempt employees. It's currently $66,560 per year ($1,280 per week) and will increase to $68,640 per year ($1,320 per week) on January 1, 2025.

Exceptions to the CA Minimum Wage Increases Employers Should Know

Employers should remember there are some instances where this minimum wage increase does not apply:

• Many California cities and counties have their own local minimum wage rates that override the state requirements.
• Fast food restaurant employees covered in California Labor Code Section 1474-1476 have their own minimum wage of $20 per hour on April 1, 2024.
• Health care workers will also have a special minimum wage that will be effective no later than January 1, 2025, depending on their facility type.

For information directly from California's Director of Finance, view or download the full PDF on the 2025 minimum wage increase here.

CA Minimum Wage Minimum Wage