What Is The Minimum Salary In California? It’s a crucial question for both employers and employees. WHAT.EDU.VN provides clear, accessible answers to your pressing compensation questions. Uncover the essentials of wage requirements and employee compensation.
1. Understanding California Salary Laws
California wage and hour laws play a significant role for both salaried and non-salaried employees. Non-exempt salaried employees receive protection from California minimum wage laws. Additionally, there’s a baseline salary requirement to qualify employees as exempt.
1.1 Definition of Exempt Employees
Exempt employees are those who are not subject to California’s wage and hour laws. To be classified as an exempt employee, the individual must meet these conditions:
- Their primary duties involve executive, administrative, or professional tasks.
- Their role requires exercising discretion and independent judgment.
- They must earn a minimum salary equivalent to twice the state minimum wage based on a 40-hour workweek.
It’s important to note that various job-specific overtime exemptions under California’s wage orders apply to specific occupations, such as outside salespersons, commissioned employees, commercial truck drivers, and live-in housekeepers. The duties, pay structure, and overtime rules can differ significantly.
Also, some unionized employees qualify for exemptions from overtime rules under certain collective bargaining agreements that provide premium overtime pay rates and at least 30% higher base wages than the minimum wage. The agreement must expressly outline wages, hours, and working conditions.
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Understanding salary classifications is essential for compliance with California labor laws.
1.2 Salaries Do Not Always Mean Exempt
While most non-exempt employees are paid hourly, they may also be paid a salary, as long as it meets the state’s minimum wage requirements. Just like hourly non-exempt workers, salaried non-exempt employees are protected by California wage and hour laws, which includes overtime laws and regulations for meal and rest breaks.
1.3 Equal Pay, Fair Pay, and Transparency
Under the California Equal Pay Act, employers must provide equal pay to employees of the opposite sex for performing equal work. The Fair Pay Act also safeguards equal pay regardless of race or ethnicity.
California’s pay transparency laws, outlined in Senate Bill 1162, require many employers with 15 or more employees to include a pay range in their job postings. If you’re already employed, you can request the pay range for your position.
2. Delving Into Minimum Wage Requirements
Non-exempt employees receive protection under California’s minimum wage laws, even if they’re on a fixed salary. It’s illegal for employers to pay employees less than the set minimum wage. Violations of minimum wage laws allow employees to recover any owed compensation.
2.1 Understanding the Minimum Wage
In 2025, the statewide minimum wage in California stands at $16.50 per hour.
Salaried employees should receive no less than the number of hours worked at the California minimum wage rate. For employees working a full-time job at 40 hours per week, the minimum salary should be no less than:
- $660.00 per week
- $34,320 per year
As non-exempt employees, salaried employees who work over the maximum number of hours should be paid based on California overtime laws. Employers cannot require non-exempt salaried employees to work more than the maximum hours without providing overtime compensation.
Example: Toni works in a call center with about 20 other employees. Toni is paid a salary based on her working 40 hours a week. In 2025, Toni’s weekly salary should be no less than $660.00 (40 x 16.50 = 660).
Toni’s boss asks Toni to come in on Saturday to work an extra 4 hours. Toni should be compensated at no less than one and one-half (1 ½) times the California minimum wage for those 4 hours worked over the 40-hour workweek maximum. Toni’s weekly salary for that week should be no less than $736.00 (40 hours at $16.50/hour ($660.00), plus 4 hours at $24.75/hour of overtime ($99.00).
The California minimum wage increased every year between 2017 and 2025, based on the following schedule. It is now $16.50 an hour:
| Year | Minimum Wage for Employers with 26 or more employees | Minimum Wage for Employers with 25 or fewer employees |
|---|---|---|
| 2021 | $14.00/hour | $13.00/hour |
| 2022 | $15.00/hour | $14.00/hour |
| 2023 | $15.50/hour | $15.50/hour |
| 2024 | $16.00/hour | $16.00/hour |
| 2025 | $16.50/hour | $16.50/hour |
Each year, California’s Director of Finance determines on or before August 1st whether the minimum wage should be adjusted based on the Consumer Price Index (CPI). If the CPI increased by more than 7%, the minimum wage must be raised by the lesser of 3.5% or the change in CPI.
As outlined below, many cities and counties in California have a minimum wage higher than the state minimum.
2.2 Cities and Counties with Higher Minimum Wages
- Los Angeles County: Minimum wage of $17.27/hour
- Berkeley: Minimum wage of $18.67/hour
- City of Los Angeles: Minimum wage of $16.78/hour
- Oakland: Minimum wage of $16.89/hour
- City of San Diego: Minimum wage of $17.25/hour
- San Francisco: Minimum wage of $18.07/hour. Increases tied to the CPI effective July 1st each following year.
- San Jose: Minimum wage of $17.95/hour
There is a federal minimum wage of $7.25 per hour. However, if you work in California, you must be paid the higher state minimum wage. If you work in a city or county with a higher minimum wage, you must be paid the higher local minimum wage.
3. Understanding White-Collar Worker Exemptions
The minimum annual salary needed to be considered a white-collar worker (“exempt employee”) is $68,640. This equals twice California’s minimum wage based on a 40-hour workweek.
Exempt employees (including independent contractors and certain unionized employees alongside white-collar workers) do not fall under most California wage and hour laws.
There exist separate minimum salary requirements for specific exempt occupations such as physicians ($103.75 per hour), computer professionals ($118,657.43 per year), and teachers at private schools (twice the minimum wage if they meet education requirements).
4. Diving Into Equal Pay Principles
The California Equal Pay Act mandates equal pay for employees performing “substantially similar work,” assessing composite skill, effort, responsibility, and similar working conditions.
The Fair Pay Act and Equal Pay Act are intended to reduce the disparity in how men and women are compensated for performing similar jobs.
4.1 Equal Pay Act Explained
An employer cannot pay men and women different salaries for similar work, unless the employer can demonstrate the wage differential is based on one or more of the following factors:
- A seniority system.
- A merit system.
- A system that measures earnings by quantity or quality of production.
- A bona fide factor other than sex, such as education, training, or experience.
The employer has to demonstrate that the bona fide factor:
- Is not based on or derived from a sex-based differential in compensation.
- Is job-related with respect to the position in question.
- Is consistent with a business necessity.
A “business necessity” means “an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve.”
Even if the employer demonstrates that a bona fide factor other than sex was used to differentiate compensation, the defense does not apply if the employee demonstrates that an alternative business practice exists that would serve the same business purpose without the wage inequality.
4.2 Fair Pay Act Details
The Fair Pay Act provides similar protections to employees of another race or ethnicity.
Employers who violate the Equal Pay Act are liable to employees for unpaid wages and interest. Additionally, the employee may be able to recover an additional equal amount as liquidated damages.
5. Understanding Pay Cut Regulations
An employer can generally reduce your salary for any lawful reason. No specific California labor law prohibits an employer from reducing an employee’s compensation. However, your employer cannot reduce your salary to a rate below the minimum wage.
5.1 Regulations for Non-Exempt Employees
An employer can reduce a non-exempt employee’s salary as long as the employee is compensated at no less than the California minimum wage. The employer must also compensate the employee for any overtime at no less than one and one-half (1 ½) times the minimum hourly wage.
Example: Megan is a non-exempt employee working at a bar with 10 total employees. In January of 2024, Megan’s employer compensates Megan based on a 40-hour workweek at $1,000 per week, or $25.00/hour.
In January of 2025, Megan’s employer says her salary will be reduced because there has been a drop in sales. Megan’s next paycheck is only $800 per week for working the same 40 hours she worked the previous week. Megan may not have a claim against the employer because the employer is compensating Megan at $20.00/hour, which is higher than the California minimum wage at the time of $16.50 per hour.
However, an employer cannot lower an employee’s salary:
- For an unlawful reason
- In retaliation for protected actions
5.2 The Importance of the Equal Pay Act
The Equal Pay Act protects employees who ask about another employee’s wages or disclose their own wage or salary. An employer shall not discriminate against an employee for:
- Disclosing the employee’s own wages
- Discussing the wages of others
- Encouraging other employees to exercise their equal pay rights
Example: After Megan had her salary reduced, she speaks to her co-worker, Joe, a male, who does substantially the same job. Megan asks Joe if his salary was reduced. Joe tells Megan he is making $1,200 a week for working 40 hours, doing the same type of job.
Megan speaks to her employer about her reduction in salary while her co-worker was being paid substantially more money. Megan’s employer tells Megan her salary will further be reduced to $700 per week because she was asking other employees about their salaries, which is none of her business.
Megan’s employer cannot retaliate against Megan by reducing her salary because inquiring about salary is protected by the Equal Pay Act in California. Additionally, Megan may have a claim against her employer for violating the Equal Pay Act by paying male employees at a higher rate than female employees for performing substantially similar work.
5.3 Understanding Exempt Employees and Pay Cuts
Generally, an employer may reduce an exempt worker’s salary as long as it does not fall below the minimum salary requirement for exempt workers. The minimum salary requirement for white-collar workers in 2025 is $68,640.
If an exempt employee’s salary drops below the minimum salary requirement, the employee may no longer be exempt. As a non-exempt employee, the employee would be protected by California’s wage and hour laws, including:
- Overtime pay
- Meal breaks
- Rest breaks
If the employer reduces an exempt employee’s salary based on a reduction of hours or partial day absences, that may disqualify the employee’s exempt status. A reduction of salary based on hours worked is inconsistent with the “salary basis” standard of exempt employees. Exempt employees are presumably paid based on their position and not for the number of hours worked.
Docking the salary of an exempt employee for disciplinary reasons can potentially nullify their exempt status and entitle them to overtime pay.
6. Addressing Labor Violation Lawsuits
California employees can file a lawsuit against employers for violating California labor laws. Common wage and hour class action lawsuits involve:
- Equal pay violations
- Failure to properly classify employees
- Failure to pay overtime
6.1 Understanding Misclassification Damages
When an employee is improperly classified as “exempt,” the employer may owe the employee damages for unpaid overtime. The employer may also owe the employee one hour’s pay for each meal break the employee was denied.
If an employer violates the California Equal Pay Act, the employer may be liable to the employee for:
- The deprived wages, including interest
- Reasonable attorney’s fees
- An additional equal amount as liquidated damages
6.2 Understanding Workplace Retaliation Damages
If an employer retaliates against an employee in violation of the California Equal Pay Act, through a reduction in salary, reduced hours, or termination, the employee may be able to recover damages. An employee may recover reinstatement and reimbursement for lost wages and work caused by the acts of the employer, including interest and appropriate equitable relief.
FAQ: Minimum Salary in California
| Question | Answer |
|---|---|
| What is the current minimum wage in California? | As of 2025, the minimum wage in California is $16.50 per hour. |
| What is the minimum salary for exempt employees in California? | As of 2025, the minimum annual salary for exempt employees is $68,640, which is twice the state minimum wage based on a 40-hour workweek. |
| Are there cities or counties in California with higher minimum wages than the state minimum? | Yes, many cities and counties in California have higher minimum wages. Examples include Los Angeles County, Berkeley, and San Francisco. |
| What should I do if my employer is paying me less than the minimum wage? | If your employer is paying you less than the minimum wage, you have the right to recover the money you are owed. You can file a wage claim with the California Labor Commissioner or consult with an employment law attorney. |
| What is the California Equal Pay Act? | The California Equal Pay Act requires employers to pay men and women equal wages for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions. |
| Can my employer reduce my salary? | Generally, your employer can reduce your salary for any lawful reason, as long as it does not fall below the minimum wage. However, your employer cannot reduce your salary for an unlawful reason or in retaliation for protected actions. |
| What can I do if I believe my employer has violated the California Equal Pay Act? | If you believe your employer has violated the California Equal Pay Act, you can file a lawsuit against them. You may be able to recover unpaid wages, interest, attorney’s fees, and liquidated damages. |
| Are there any exceptions to the minimum wage law in California? | Yes, there are some exceptions to the minimum wage law, such as for certain exempt employees, outside salespersons, and student employees. However, these exceptions are limited and specific. |
| How often does the minimum wage change in California? | The minimum wage in California has increased annually between 2017 and 2025. Future adjustments are determined by the Director of Finance based on the Consumer Price Index (CPI). |
| What rights do I have if my employer retaliates against me for asking about wages? | The Equal Pay Act protects employees who inquire about or discuss wages. It is illegal for an employer to retaliate against you for disclosing your own wages, discussing the wages of others, or encouraging other employees to exercise their equal pay rights. |
| If an employer reduces an exempt employee’s salary based on a reduction of hours, does that impact their exempt status? | Yes, if the employer reduces an exempt employee’s salary based on a reduction of hours or partial day absences, that may disqualify the employee’s exempt status. |
| What should an employee do if they believe they have been misclassified as exempt? | If an employee believes they have been misclassified as exempt, they should consult with an employment attorney. They may be entitled to unpaid overtime and other damages. |
| What constitutes a “business necessity” that would justify a wage differential under the Equal Pay Act? | A “business necessity” is “an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve.” |
| Are there resources available to help me understand my rights under California labor laws? | Yes, there are many resources available to help you understand your rights under California labor laws. You can consult with an employment law attorney, visit the California Department of Industrial Relations website, or contact a labor union. |
| If a city’s minimum wage is higher than the state’s, which one applies? | If you work in a city or county with a higher minimum wage, you must be paid the higher local minimum wage. The local wage always takes precedence over the state or federal wage if it is higher. |
| What are the potential penalties for employers who violate California’s wage laws? | Employers who violate California’s wage laws can face significant penalties, including being liable for unpaid wages, interest, attorney’s fees, liquidated damages, and even criminal charges in some cases. Additionally, they may face civil penalties and be required to pay restitution to affected employees. |
| How does California’s minimum wage compare to the federal minimum wage? | California’s minimum wage is significantly higher than the federal minimum wage, which is $7.25 per hour. California’s higher minimum wage reflects the state’s higher cost of living and commitment to providing a fair wage for workers. |
| What factors can an employer legally consider when determining an employee’s salary? | An employer can legally consider factors such as seniority, merit, quantity or quality of production, education, training, or experience when determining an employee’s salary. However, these factors must be applied fairly and consistently and cannot be used to discriminate against employees based on protected characteristics such as sex, race, or ethnicity. |
| Can an employer reduce an exempt employee’s vacation or sick time without affecting their exempt status? | Generally, an employer can reduce an exempt employee’s vacation or sick time without affecting their exempt status, as long as the employee still receives the minimum salary required for exempt employees. However, the policy must be applied consistently to all employees in the same job classification. |
| What specific types of jobs are most commonly misclassified as exempt in California? | Common misclassifications include positions where employees spend a significant portion of their time performing non-exempt tasks (e.g., manual labor or routine clerical work), or where employees do not exercise the level of independent judgment and discretion required for exempt status. Examples include assistant managers, customer service representatives, and administrative assistants. |
| What types of damages can an employee recover in a successful wage and hour lawsuit in California? | Employees can recover various types of damages in a successful wage and hour lawsuit, including unpaid wages (including overtime), interest on unpaid wages, penalties for violations of wage laws, attorney’s fees, and in some cases, liquidated damages. Additionally, they may be able to recover damages for emotional distress or punitive damages in cases of egregious employer misconduct. |
| What is the role of the California Labor Commissioner in enforcing wage laws? | The California Labor Commissioner is responsible for enforcing state labor laws, including wage and hour laws. The Labor Commissioner investigates wage claims, conducts audits of employers, and issues citations and penalties for violations of labor laws. Additionally, the Labor Commissioner provides education and outreach to employers and employees regarding their rights and responsibilities under California law. |
| How does the California Equal Pay Act address pay secrecy policies? | The California Equal Pay Act prohibits employers from having pay secrecy policies that prevent employees from discussing their wages with one another. Employers cannot retaliate against employees for disclosing their own wages, discussing the wages of others, or encouraging other employees to exercise their equal pay rights. |
| How can employees protect themselves from wage theft and other labor law violations? | Employees can protect themselves by keeping accurate records of their hours worked and wages paid, understanding their rights under California labor laws, and seeking legal advice if they believe their rights have been violated. Additionally, they can report suspected violations to the California Labor Commissioner or other appropriate government agencies. |
| What are the differences in wage laws that apply to independent contractors versus employees in California? | Independent contractors are generally not covered by many of California’s wage and hour laws that protect employees, such as minimum wage, overtime pay, and meal and rest break requirements. Misclassifying an employee as an independent contractor can result in significant penalties for employers. |
| What resources are available for small businesses to ensure compliance with California’s complex wage and hour laws? | Small businesses can access resources such as the California Chamber of Commerce, the Small Business Administration (SBA), and legal professionals specializing in labor law. These resources provide guidance on compliance requirements, sample policies, and training programs to help small businesses navigate California’s complex wage and hour laws. |
| How does California’s pay transparency law affect job postings and internal promotions? | California’s pay transparency law requires employers with 15 or more employees to include a pay range in their job postings. Additionally, if an employee requests it, employers must provide the pay range for their current position. This law aims to promote pay equity and reduce wage disparities based on gender, race, and ethnicity. |
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