wage and hour law – Workforce

April 29, 2025May 5, 2025

California Minimum Wage by City and County: What Employers Need to Know

Summary

Payroll deductions can be more challenging to manage for hourly teams due to different factors such as variable schedules, different pay rates, higher turnover, and location-based compliance rules.
Handling payroll deductions for hourly teams goes beyond automation. It requires a system that can adapt to the complexities of hourly work.
Workforce.com’s payroll software simplifies deduction tracking, ensuring accurate wage calculations and compliance on every pay run.

Effective January 1, 2025, the minimum wage in California is at $16.50 per hour. But that’s not the only thing you should know, especially if you have multiple business locations in the state. Many cities and counties in California have their own minimum wage laws, many with rates higher than the state’s.

Whether you’re operating in one city or twenty, staying compliant means more than being adept at the law; it’s about having the systems in place to implement it.

The minimum wage landscape in California

California’s state minimum wage is currently $16.50, which is well above the federal minimum, with enforcement being overseen by the Department of Industrial Relations. The 2025 increase was deemed necessary because the consumer price index (CPI) grew by 3% over the previous year, as required by state law.

California also enforces prevailing minimum wage laws specific to certain industries, such as fast food and healthcare.

Fast food employees – $20 per hour, effective April 1, 2024 for covered workers
Healthcare workers – $18-23 per hour effective October 16. 2024 for covered workers depending on the type of facility

Beyond statewide and industry-specific labor laws, business owners must also monitor local minimum wage rates. Some localities follow the state minimum wage, but other cities and counties impose their own, which is often higher than the state’s. Cost of living, economic conditions, and local policy goals are typically the factors that drive local regulations for setting unique minimum wage rates.

California minimum wage by city or county

Below is a breakdown of cities and counties in California that have their own, many of which have higher minimum wage rates than the state’s.

City/County	2025 Minimum Wage
Alameda	$17
Belmont	$18.30
Berkeley	$18.67
Burlingame	$17.43
Cupertino	$18.20
Daly City	$17.07
East Palo Alto	$17.45
El Cerrito	$18.34
Emeryville	$19.36
Foster City	$17.39
Fremont	$17.30
Half Moon Bay	$17.30
Hayward	$17.36 *$16.50 or state minimum wage for businesses with 25 or fewer employers
Los Altos	$18.20
Los Angeles City	$17.28
Los Angeles County (unincorporated)	$17.27
Malibu	$17.27
Menlo Park	$17.27
Milpitas	$17.70
Mountain View	$19.20
Novato	$17
Oakland	$16.89
Palo Alto	$18.20
Pasadena	$17.50
Petaluma	$17.97
Redwood City	$18.20
Richmond	$17.77
San Carlos	$17.32
San Diego	$17.25
San Francisco	$18.67
San Jose	$17.95
San Mateo	$17.95
San Mateo County (unincorporated)	$17.46
Santa Clara	$17.27
Santa Rosa	$17.87
Sonoma	$18.02 $16.96 for employers with 25 or fewer employees
South San Francisco	$17.70
Sunnyvale	$19.00
West Hollywood

Local minimum wage variations by size

In some cities, local minimum wages include different rates based on employer size. For example, Hayward and Sonoma set lower minimum wage thresholds for small businesses with 25 or fewer employees.

This adds yet another layer of complexity for business owners, especially when it comes to calculating pay accurately and staying compliant across multiple jurisdictions.

Understanding unincorporated localities

Another detail to watch out for is unincorporated areas. These regions are not part of an incorporated city but fall under the direct jurisdiction of the county government.

Take Los Angeles County, for example. Cities like Los Angeles or Pasadena have their own local governments and wage laws. But places like Hacienda Heights and Walnut Park are unincorporated and are not part of the City of Los Angeles but within Los Angeles County. This means that the county’s minimum wage applies to them, not the city’s.

Challenges for California employers

Handling minimum wage in California presents unique challenges, especially for businesses operating in multiple areas. Here are some challenges business owners typically face and tips on what to watch out for:

Payroll complexities

Managing payroll is never simple, but it becomes more complex when you’re dealing with multiple locations, varying pay rates, and hourly employees working in various roles. Add to that the different local minimum wages across cities and counties. It could be easy to overlook details, such as mistakenly paying an employee in an unincorporated area the city minimum wage rather than the county wage.

Inconsistent labor costs

Multiple minimum wages in California, along with industry-specific wage laws, overtime and meal/rest break laws, and other labor ordinances, can lead to inconsistent labor costs for businesses in the state. This presents a significant challenge to organizations wanting to keep their labor costs leveled and consistent as much as possible.

Wage compression issues

Wage compression occurs when the pay gap between entry-level employees and more experienced workers narrows. This often happens when minimum wage increases outpace raises for more seasoned staff, making the difference between the two smaller.

To further illustrate, here’s an example. Let’s say your business in Los Angeles used to pay entry-level workers $16 and shift supervisors $18. And now, the minimum wage is at $17.28 per hour. Naturally, entry-level pay should follow this new rate to comply with the law. However, your shift supervisors will end up just earning $0.72 more, which may not be reflective of their responsibilities and roles.

This can result in a drop in morale, and experienced employees may feel undervalued. Raises may also become reactive rather than strategic, creating a ripple effect in your payroll structure.

Best practices for complying with California’s minimum wage laws

California has one of the most complex labor landscapes in the country, including local minimum wage rates and rules. So, how do employers stay on top of compliance?

Automate HR and payroll

Even the most experienced payroll and HR professionals can make mistakes, especially when handling multiple wage rates across cities, industries, and employee roles. That’s why using software to automate processes is vital.

However, not all payroll systems are built the same. If you’re managing something as nuanced as California minimum wage laws, you need a robust and centralized system. This is where Workforce.com comes in, and these are the ways it helps California businesses stay compliant and efficient:

Wage and hour automation: Multiple pay rates and minimum wages are the least of your concerns with Workforce.com. The platform automatically applies the minimum wage according to role and location, including cases where employees work multiple roles across different cities. It also accurately calculates overtime.
Employee classifications: Another cause of payroll mistakes is misclassifying employees, and that’s one thing that Workforce.com eliminates for employers because all data and information live in one place. This includes employee details, such as their employment status, corresponding pay rates, and bank information. If any employee information gets changed down the line, it’s reflected instantly across schedules and payroll. No need for manual re-entry.
Accurate time and attendance tracking: Inaccurate employee time logs can lead to payroll mistakes.. Workforce.com turns employee clock-in and clock-out into timesheets, which managers can easily verify and check.
Labor forecasting: California’s ever-changing labor rules can cause inconsistent labor costs. Workforce.com helps stabilize costs by forecasting demand based on relevant factors such as historical sales, upcoming events, booked appointments, foot traffic, and even weather.

When creating schedules, managers can easily see how much each shift would cost and receive alerts if they schedule someone for overtime or forget to schedule break times. This will help avoid unnecessary labor costs or potential fines for non-compliance.
Real-time alerts: Managers get live updates when employees fail to clock in or out for a shift or break time. They will also get alerts when employees are about to breach overtime, especially if they’re not scheduled for it. This allows teams to fix small issues before they turn into bigger problems.

Conduct regular wage audits

Conducting wage audits in the state of California is essential because it helps employers stay on top of local rate changes. While most cities raise their minimum wages annually, note that they can do so on different schedules.

Regular wage audits ensure your pay structure reflects the latest local rates. They also help you catch wage compression issues early, keeping your compensation strategy fair and employee morale intact. In case you face a labor board inquiry or employee complaint, having audit records on hand gives you the evidence you need to respond quickly.

Train your managers

Automation is powerful, but it also pays to equip your managers with the right information and training on handling complicated labor rules.

Regularly train your management team on California’s local wage laws. These rules can change frequently, so ongoing refreshers are vital. Managers should also have tools and resources to help them explain wage-related issues and faqs to employees and recognize compliance gaps in workflows or systems.

California’s minimum wage rules can change quickly. Stay ahead by automating wage rates and catching compliance issues before payroll with Workforce.com. See the platform in action and book a demo today.

November 2, 2022

New Labor Laws Taking Effect in 2023

The new year is fast approaching, and with its arrival comes a host of new labor laws that will impact millions of workers and their employers across the nation. Being aware of these changes prior to their implementation will allow for all parties affected to make a smoother transition heading into 2023.

New Year, New Minimum Wage

One such change to be on the lookout for this January is an increase to the minimum wage across various states. While the federal rate will continue to hold steady at $7.25 per hour, numerous states have established their own rates, which in some cases far exceed the federal amount that has gone unchanged for the past 13 years.

Whether due to inflationary pressures or phasing in statutory increases, minimum wages will be going up across the nation. From Maine’s bump to $13.80/hour to Washington’s boost to a nationwide high of $15.74/hour, these increases will all go into effect in 2023.

In some states, however, it’s not so cut and dry. New York, for instance, incorporates different minimum wages for different parts of the state and different industries. So, while a New York City construction worker earning minimum wage can expect to make $15 per hour at the start of the new year, a construction worker doing similar work in upstate New York will command just $14.20 per hour.

Another important consideration for employers to keep in mind for minimum wage changes next year is that they won’t all necessarily kick in on January 1. Several states will be enacting their wage changes at some point later in the year, including Connecticut (June 1), Oregon (July 1), Florida (Sept. 30), and Hawaii (Oct. 1).

Finally, when it comes to the federal minimum wage, some exceptions apply under specific circumstances to workers with disabilities, tipped employees, full-time students, and workers under 20 years of age in their first 90 consecutive calendar days of employment.

Whatever rates are finalized in each state for 2023, employers must be ready before the end of the year to meet the new minimum wage requirements and understand the rules and regulations unique to their state. Failure to observe newly implemented wage laws can result in a multitude of fines and penalties.

New Labor Laws Across the Nation

It’s not just minimum wage laws that will see changes in the year ahead. A host of new labor laws and amendments will also be initiated throughout the United States in 2023, and depending on what state you’re in, the changes can be substantial. Below are just a select few that can have a significant impact on those involved.

California

California has some of the strictest labor laws in the country, and that continues to be the case heading into 2023. An amendment to the Pay Transparency Law will now require employers to provide the pay scale for any job applicant or current employee upon request. And, employers with more than 14 employees must include the pay scale for a position in any job posting, including those positions listed on third-party sites. Employers will also need to maintain records identifying the job title and wage rate history for each employee throughout their time at the company.

Lastly, fast-food chains in the Golden State will need to read up on how to comply with the upcoming establishment of a fast-food council, depending on whether or not the referendum seeking to delay the bill is successful come December 4th.

Colorado

Doing business in Colorado? Get ready for the Paid Medical and Family Leave (PFML) to begin next year. Employees who meet the eligibility requirements will now be able to receive 12 weeks of paid family and medical leave funded through a payroll tax paid by both employers and employees in a 50/50 split. The paid leave needs to be funded before any employee is able to take the leave. Employers and employees will start paying into PFML in 2023, and the earliest workers will be able to take this paid leave is January 1, 2024.

New York

While New York already has an established Paid Family Leave, a noteworthy change has been made to it beginning in 2023. As of the new year, the list of family members for whom eligible workers can take Paid Family Leave to care for will include siblings with serious health conditions. This includes biological siblings, adopted siblings, step-siblings, and half-siblings. The family members requiring care won’t even have to live in the state of New York.

Final Thoughts

There are myriad new and amended labor laws that will be going into effect throughout the U.S. in the coming year. Being aware of the ones your business may be subject to can help minimize the likelihood of costly fines and potential labor lawsuits down the road. Every effort should be made to stay on top of labor legislation that must be followed.

No doubt, workers across the country will be rejoicing in the new labor laws set for 2023 that benefit them in a variety of ways. Employers may not be quite as jubilant with these changes, but must nevertheless find ways to accommodate these newly imposed laws while continuing to grow their business.

October 13, 2022April 11, 2023

Wage and Hour Laws in 2022: What Employers Need to Know

Whether a mom-and-pop shop with a handful of employees or a large corporation staffing thousands, complying with certain state and federal labor laws is required of every business. Failure to adhere to these rules and regulations set forth by the government can lead to significant penalties and fines, not to mention plenty of bad publicity. It’s also possible for workers to file a complaint against their employers, which could result in a costly lawsuit.

For these reasons, it’s critical for employers to familiarize themselves with the Fair Labor Standard Act (FLSA) – the labor law established to ensure employees are compensated fairly for the work they perform. This law governs such workforce practices as minimum wage, overtime pay, meal breaks, rest periods and sick leave.

While wage and hour laws are nationally enforced, they do vary from state to state, and can often change. Staying current with the latest changes in the laws that apply to your business will not only help you avoid hefty fines, but also help maintain a harmonious work relationship with employees. So, what exactly is the federal wage and hour law?

Minimum Wage

Simply put, all employees covered by the Fair Labor Standard Act must be paid at least the minimum wage. At the time of this writing, federal minimum wage laws set the minimum wage at $7.25/hour. Many states, however, have their own minimum wage requirements that call for more than the federal amount, and these amounts can vary significantly. For instance, the state minimum wage in Nebraska is $9/hour, while in New York it is now $14.20/hour.

Presently, 30 states and Washington D.C. have minimum wages above the $7.25 federal minimum wage. Only five states have not adopted a state minimum wage: Alabama, Louisiana, Mississippi, South Carolina and Tennessee. Two states, Georgia and Wyoming, actually have a minimum wage below $7.25/hour. One thing is universal, however, and that is any covered non-exempt employee will always be entitled to the highest minimum wage amount available to them.

It should be noted that there are some exceptions to receiving the federal minimum wage. Employees who collect the bulk of their pay in tips usually can be paid a lesser minimum wage than $7.25/hour. On the federal level, the tipped minimum wage is $2.13/hour. However, some states have a higher tipped minimum wage, and some states call for tipped employees to be compensated the same minimum wage as non-tipped employees. Additionally, employees under the age of 20 may be paid a minimum wage of $4.25 per hour for their initial 3 months of employment, or until they reach 20 years of age. After such time, they must be paid the regular minimum wage rate.

Earlier this year, another exception to the federal $7.25 minimum wage rate was made. The Biden administration directed its agencies to increase the minimum wage for federal employees to $15 an hour. The new policy, which took effect Jan. 30, 2022, will give a significant pay raise to approximately 70,000 federal workers.

Overtime Pay

Along with a minimum wage, employees must be provided additional compensation apart from their standard work hours. This is considered overtime pay, and according to the US Department of Labor, employers must pay covered non-exempt employees at least one and a half times their standard pay in the event they work more than 40 hours in a single workweek. There is no limit to the number of hours employees aged 16 and older can work in any given workweek. However, the FLSA does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest.

While not every employee’s workweek has the same start and end dates, they all have the same parameters in that they are fixed and regularly recurring periods of 168 hours — seven consecutive 24-hour periods. A workweek can begin at any hour of any day. In addition, different workweeks can be set up for different employees or groups within the company. In most cases, any overtime payment earned during a given workweek must be paid on the regular pay day for the week in which the wages were earned.

Exempt vs. Non-exempt Employees

Since ONLY non-exempt employees are eligible for overtime pay, it’s important to identify the qualifications needed for this status. According to the Department of Labor, any covered employee who earns less than $35,568 per year, or $684 per week, is entitled to overtime pay for work performed in excess of 40 hours during one workweek. Further qualifying classifications of non-exempt employees include those that are directly supervised by a manager, and those not in an executive, administrative, professional, or outside sales position.

An exempt employee on the other hand is not subject to the same rules and regulations established by the FLSA. Those in this classification do not have to be paid overtime for extra hours worked during a given workweek. To hold exempt status, employees must earn in excess of $35,568 annually and their work must fall under an executive, professional, administrative, or outside sales category.

The inability to distinguish non-exempt from exempt employees can negatively affect business in a variety of ways, including fines and penalties, regulatory enforcement action, and employee lawsuits for failure to pay overtime. In some cases, reclassifying an employee from exempt to non-exempt (or vice versa) is called for, but it can be a tricky path to navigate.

For instance, a non-exempt employee whose status is changed to exempt may be angered by no longer being eligible to earn overtime pay. On the other hand, an exempt employee who is reclassified as non-exempt may see the change as a bump down in status at the company. Before making any changes to an employee’s status, management should take the time to explain the reasoning behind the decision. Whichever status an employee is given, they are still equally entitled to such additional protections as the Family Medical and Family Leaves Act, the Occupational Safety and Health Act, American’s with Disabilities Act, and even file for worker’s compensation.

Final Thoughts

Better understanding the wage and hour laws your business is subject to can certainly help safeguard against costly fines and potential lawsuits. State labor law guides can serve as an excellent resource to determine the rules and regulations required in your area.

Working with skilled HR and workforce management professionals is another effective way to help navigate the minefield of these unique and ever-changing laws, as is receiving legal advice from attorneys well-versed in all types of labor law. The ultimate goal is to always stay on top of the necessary labor legislation that must be followed.