California Expedites Minimum Wage Increases

​The Department of Finance has notified California Gov. Gavin Newsom poor economic conditions have necessitated expedited increases to the minimum wage. Changes in the consumer price index (CPI) from July 1, 2021 through June 30, 2022 require the state to bring forward by one calendar year, from 2024 to 2023, the date when the state must annually adjust the minimum wage rate.

It was previously expected that the $15-per-hour minimum wage would be applied to employers of all sizes in 2023, but instead the minimum wage will increase to $15.50 per hour for all employers on January 1, 2023.
 
California’s minimum wage law requires the rate adjustment be the lower of 3.5% or the rate of inflation which is 7.9% during the relevant period. Therefore, 3.5% of $15 is 50 cents. Whenever the minimum wage increases, those workers who are exempt must be paid more than 1.5 times the minimum wage. Agencies should check their local wage ordinances as they may have different rates that will be applied as a result of inflation.