STATE MINIMUM WAGE INCREASE – 01/01/2021

What you need to know

The State of California will implement the next phase of minimum wage increases.
 
Beginning on 01/01/2021 the state minimum wage will increase for those employers that have 25 or fewer employees.
 
The schedule is as follows for employers with 25 or fewer employees:

On January 1, 2021, the minimum wage will increase to $13 per hour.
On January 1, 2022, the minimum wage will increase to $14 per hour.
On January 1, 2023, the minimum wage will increase to $15 per hour.

Also beginning on 01/01/2021 the state minimum wage will increase for those employers that have 26 or more employees.
 
The schedule is as follows for employers with 26 or more employees:

On January 1, 2021, the minimum wage will increase to $14 per hour.
On January 1, 2022, the minimum wage will increase to $15 per hour.

Salaried Employees Affected

The minimum salary threshold for the administrative, executive and professional exemptions is $54,080 annually for employers with 25 or fewer employees.
The minimum salary rate is $58,240 annually for employers with 26 or more employees.

Future increases will also affect the salary threshold.

Action Required

For those that have 25 or fewer employees, hourly wages must meet the minimum wage of $13.00 per hour and salaries for exempt employees must meet the annual minimum of $54,080. 
 
For those that have 26 or more employees, hourly wages must meet the minimum wage of $14.00 per hour and salaries for exempt employees must meet the annual minimum of $58,240. 
 
Be Aware

Certain cities have adopted a minimum wage that exceeds the California minimum.  Employers that fall under such a local minimum wage ordinance are advised to review the requirements. 

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