How California’s Minimum Wage Rates Will Change in 2024
Certain California workers can look forward to a pay bump in the coming year, thanks to new legislation recently approved by the governor.
Out of hundreds of bills debated by lawmakers in the fall 2023 session, two initiatives to increase minimum wage pay for Californians in the healthcare and fast food industries were among those finally signed into law by Governor Newsom in October.
In this blog post, we’ll dig into what these new laws, Senate Bill 525 and Assembly Bill 1228, mean for workers.
First, we’ll review the current state of California’s minimum wage laws, then walk through the details of the pay hike coming in 2024, and finally, run through some common types of wage theft that California employees should be aware of.
How Is Minimum Wage Calculated In California?
California is one of several U.S. states where the statewide minimum wage is higher than the minimum required by federal law. In 2023, the national minimum wage is $7.25 per hour.
In California, however, employers are required to pay employees a minimum of $15.50 — at base. Some cities — like San Francisco, San Jose, and Los Angeles — have established even higher minimum wage rates.
The good news for workers? Employers are legally required to pay their employees according to the highest minimum wage that applies, depending on where their business is located.
For instance, a convenience store owner in LA can’t just pay the statewide rate and call it a day: if employees don’t receive the LA minimum wage, the company could face fines from the city and potential legal action from employees who were denied wages.
California’s state minimum wage has actually been steadily increasing over time. This started in 2017, with the goal of gradually bringing all employees to a statewide baseline wage of $15.
Once that point was reached, state law decreed that California’s minimum wage rate would be adjusted on an annual basis according to the national consumer price index (CPI), which measures variation in the cost of living over time.
For that reason, due to increases in inflation over the past year, in 2024, all California employers regardless of size will be required to increase minimum pay to a rate of $16.00 per hour. Cities and counties where the minimum wage is higher must also adjust their rates accordingly.
How Is The Minimum Wage Changing For California Employees In 2024?
Aside from the increase in the statewide base wage rate, California workers who work in certain industries can also expect higher minimum pay rates in the year to come, thanks to two new laws.
Senate Bill 525: Wage increases for health care workers
The first bill, SB 525, lays out a schedule of different wage rates — set above the statewide minimum — to be paid to workers employed by health care facilities.
The workers eligible for these new wage rates aren’t just limited to nurses and doctors. According to the bill, a “covered health care employee” includes anyone working for a facility that “provides patient care, health care services, or services supporting the provision of health care,” including:
- Medical residents, interns or fellows,
- Patient care technicians,
- Housekeeping staff persons,
- Clerical workers,
- Nonmanagerial administrative workers,
- Food service workers,
- Gift shop workers,
- Technical and ancillary services workers,
- Medical coding and medical billing personnel,
- Call center and warehouse workers, and
- Laundry workers.
The new minimum pay rates are determined by the type of work each employee does and the place where they do it.
A groundskeeper at an urgent care clinic, for instance, should be paid $21 per hour, while a groundskeeper working at a hospital in the state would receive at least $18. These wage rates officially take effect June 1, 2024 and are scheduled to increase gradually each calendar year.
The law lays out new minimum pay requirements for salaried employees as well as hourly workers. Any employees who receive salaries must be paid a monthly salary equivalent to either:
- At least 150% of the health care worker minimum wage, or
- 200% of the relevant local or state minimum wage (whichever amount is greater).
Importantly, SB 525 also applies to independent contractors. The new law automatically extends these minimum wage rates to contract workers who work at qualified health care facilities (without requiring them to undergo the tests usually used to determine employee status and pay privileges).
The workers who are exempted from SB 525’s pay schedule are outside salespersons, public sector workers whose primary duties are not health care, waste collection workers, and workers providing medical transportation services.
Assembly Bill 1228: New base wage for fast food workers
The next change to California’s minimum wage rates comes from AB 1228, which impacts workers in the fast food industry. As of April 1, 2024, all employees of national fast food chains are entitled to a minimum wage of $20 per hour.
This base rate also has the potential to rise in the near future, as determined by the newly created Fast Food Council.
According to the text of the bill, this group would be responsible for establishing new regulations specifically for the California fast food industry: for instance, limits on working hours, guidelines for employee training, standards for acceptable working conditions, and, of course, minimum wage rates.
AB 1228 gives the Fast Food Council the power to increase the minimum wage annually, starting on January 1, 2025.
But the new law specifies that any increases to minimum pay in a given year must be no greater than 3.5% or the annual rate of inflation measured in the national consumer price index.
These new wage standards for fast food workers may not be around forever, though. AB 1228 also has a “sunset clause”: unless future lawmakers vote to extend it, the law will go out of effect in 2029.
How Do I Know If My Employer Is Paying Me A Legal Wage?
For one, make sure you know if your city or county has a minimum wage rate that’s different from the statewide wage. The UC Berkeley Labor Center keeps an updated list of the current minimum wage rate in effect in cities and regions across California.
Since the law requires California’s minimum wage to be adjusted based on the rate of inflation, it’s important to stay informed about any changes to the wage rates announced by the Labor Commissioner in a given year.
Depending on your industry, your pay might also be subject to an additional set of rules called a “wage order.” These are established by the state Industrial Welfare Commission and lay out certain industry-specific regulations for employers, usually around minimum pay, overtime, and legal wage deductions.
There are also some situations when the minimum wage doesn’t apply. California law doesn’t require minimum wage to be paid to:
- Executives, administrative, and professional employees,
- Learners or trainees,
- Indentured apprentices,
- Employees who are immediate family members,
- Outside salespersons,
- Workers at a camp,
- Independent contractors, or
- Workers with certain mental or physical disabilities.
It can be confusing to keep track of all of the state and local regulations that govern when and how much compensation you’re legally entitled to receive.
Unfortunately, sometimes employers will take advantage of workers’ ignorance of the most up-to-date laws. Paying workers less than the applicable legal minimum, failing to comply with overtime rates, denying legally required meal and rest breaks — all of these are ways that employers across industries get away with stealing compensation from their employees.
When to Get in Contact With an Employment Lawyer
That’s why, if you have questions or concerns about your legal rights to minimum wage or employee benefits, it’s a good idea to consult with an employment lawyer.
An attorney with expertise in California’s state and local labor laws is in the best position to assess your situation and identify any potential employer wrongdoing.
If you have been a victim of wage theft or another crime, an employment lawyer can help you through the legal process of recovering the money you’re owed.
Ottinger Employment Lawyers has over 20 years of employment law experience in California. Our attorneys have the knowledge, skill, and passion required to fight for your right to just compensation.
If you have any questions about California’s minimum wage laws or believe your employee rights have been violated, please reach out to our firm by calling (866) 442-6755 or by contacting us online.