Effective January 1, 2023, California employers will be required to meet new minimum wage requirements, at both the state and local level.  This increase in the minimum wage affects not only non-exempt employees, but also the minimum annual salary requirement for overtime exempt employees.

Increase and Consolidation of the California Minimum Wage

Previously, the State of California employed a two-tiered minimum wage system, requiring employers with 25 or more employees to pay a higher minimum wage than employers with fewer than 25 employees.  Beginning on January 1, 2023, all employers, regardless of size, must provide their employees a minimum wage of not less than $15.50 per hour.

Increase to the Minimum Annual Salary for Overtime-Exempt Employees

California law provides that overtime-exempt employees must receive a salary that is not less than two times the state minimum wage.  In light of the new increase to the state minimum wage, effective January 1, 2023, the minimum annual salary for overtime-exempt employees will also increase to $64,480.

A Higher Minimum Wage for Employees Working in Select California Cities

Select California cities will raise the minimum wage for non-exempt employees working within city limits.  Non-exempt employees working within one of these cities must be paid the local minimum wage when greater than the California state minimum wage.  However, overtime-exempt employees working in one of these cities need not be paid more than the California state minimum annual salary of $64,480.  The following list contains the local minimum wage rate, effective January 1, 2023, for non-exempt employees working in each of the California cities listed below:

Jurisdiction Minimum Wage Rate
Belmont $16.75/hour
Burlingame $16.47/hour
Cupertino $17.20/hour
Daly City $16.07/hour
East Palo Alto $16.50/hour
El Cerrito $17.35/hour
Foster City $16.50/hour
Half Moon Bay $16.45/hour
Hayward

$16.34/hour (26 or more employees)

$15.50/hour (1-25 employees)

Los Altos $17.20/hour
Menlo Park $16.20/hour
Mountain View $18.15/hour
Novato

$16.32/hour (100 or more employees, including people employed outside the city)

$16.07/hour (26-99 employees)

$15.53/hour (1-25 employees)

Oakland $15.97/hour
Palo Alto $17.25/hour
Petaluma $17.06/hour
Redwood City $17.00/hour
Richmond $16.17/hour
San Carlos $16.32/hour
San Diego $16.30/hour
South San Francisco $16.70/hour
San Jose $17.00/hour
San Leandro Current $15.00/hour rate expected to increase on 1/1/23, as it will be below the state minimum wage.
San Mateo $16.75/hour
Santa Clara $17.20/hour
Santa Rosa $17.06/hour
Sonoma

$17.00/hour (26 or more employees, including those working outside the city)

$16.00/hour (1-25 employees)

Sunnyvale $17.95/hour
West Hollywood

$17.50/hour (50 or more employees)

$17/hour (1-49 employees)

California employers should work with their payroll providers to increase the relevant minimum wage for affected exempt and non-exempt employees, and ensure that the new rate is paid and properly recorded on employee pay stubs by January 1, 2023.

 

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Photo of Tony Oncidi Tony Oncidi

Anthony J. Oncidi is the co-chair of the Labor & Employment Law Department and heads the West Coast Labor & Employment group in the firm’s Los Angeles office.

Tony represents employers and management in all aspects of labor relations and employment law, including…

Anthony J. Oncidi is the co-chair of the Labor & Employment Law Department and heads the West Coast Labor & Employment group in the firm’s Los Angeles office.

Tony represents employers and management in all aspects of labor relations and employment law, including litigation and preventive counseling, wage and hour matters, including class actions, wrongful termination, employee discipline, Title VII and the California Fair Employment and Housing Act, executive employment contract disputes, sexual harassment training and investigations, workplace violence, drug testing and privacy issues, Sarbanes-Oxley claims and employee raiding and trade secret protection. A substantial portion of Tony’s practice involves the defense of employers in large class actions, employment discrimination, harassment and wrongful termination litigation in state and federal court as well as arbitration proceedings, including FINRA matters.

Tony is recognized as a leading lawyer by such highly respected publications and organizations as the Los Angeles Daily JournalThe Hollywood Reporter, and Chambers USA, which gives him the highest possible rating (“Band 1”) for Labor & Employment.  According to Chambers USA, clients say Tony is “brilliant at what he does… He is even keeled, has a high emotional IQ, is a great legal writer and orator, and never gives up.” Other clients report:  “Tony has an outstanding reputation” and he is “smart, cost effective and appropriately aggressive.” Tony is hailed as “outstanding,” particularly for his “ability to merge top-shelf lawyerly advice with pragmatic business acumen.” He is highly respected in the industry, with other commentators lauding him as a “phenomenal strategist” and “one of the top employment litigators in the country.”

“Tony is the author of the treatise titled Employment Discrimination Depositions (Juris Pub’g 2020; www.jurispub.com), co-author of Proskauer on Privacy (PLI 2020), and, since 1990, has been a regular columnist for the official publication of the Labor and Employment Law Section of the State Bar of California and the Los Angeles Daily Journal.

Tony has been a featured guest on Fox 11 News and CBS News in Los Angeles. He has been interviewed and quoted by leading national media outlets such as The National Law JournalBloomberg News, The New York Times, and Newsweek and Time magazines. Tony is a frequent speaker on employment law topics for large and small groups of employers and their counsel, including the Society for Human Resource Management (“SHRM”), PIHRA, the National CLE Conference, National Business Institute, the Employment Round Table of Southern California (Board Member), the Council on Education in Management, the Institute for Corporate Counsel, the State Bar of California, the California Continuing Education of the Bar Program and the Los Angeles and Beverly Hills Bar Associations. He has testified as an expert witness regarding wage and hour issues as well as the California Fair Employment and Housing Act and has served as a faculty member of the National Employment Law Institute. He has served as an arbitrator in an employment discrimination matter.

Tony is an appointed Hearing Examiner for the Los Angeles Police Commission Board of Rights and has served as an Adjunct Professor of Law and a guest lecturer at USC Law School and a guest lecturer at UCLA Law School.