Minimum Wage Increase Reminder

Due to the enactment of Senate Bill (SB) 3, the California minimum wage increased to $15.50 per hour, effective January 1, 2023, for all employers, regardless of size.

Employers always must pay the local minimum wage in the employer’s place of business if it is higher than the state minimum wage. And employers with exempt employees should evaluate their workers’ salaries because exempt employees in California generally must earn a minimum monthly salary of no less than two times the state minimum wage for full-time employment.

Ensure your payroll team is prepared to process the increases and your back end support is aligned with ensuring your staff is properly paid with proper wage earnings as of the first of the new year.

Be prepared for wage compression and how you will handle such conversations and decisions for your business. Minimum wage increases most often lead to wage compression issues, meaning if a person is currently 5% above minimum wage rates, they may expect to be 5% above in the coming year as well which could me more raises for employees already above the minimum wage threshold. In what is already a difficult labor market your plan must be rock solid in addressing these types of issues so as to set clear communication and not cause operational disruption.

Here is a complete listing of minimum wages for the United States in 2023. These tables are subject to change pending legislation and local ordinances.