California employers face a multi-billion dollar question in 2025. The estimated annual cost of the new California minimum wage is massive and rippling across the state. And if you’re operating in multiple jurisdictions, your compliance complexity just multiplied exponentially.
The statewide minimum wage hit $16.50 per hour on January 1, 2025, but that’s just the baseline. Factor in industry-specific rates reaching $24 per hour, plus over 30 cities and counties with their own requirements, and you’re looking at a compliance maze that can trigger significant penalties per employee per pay period for mistakes.
Smart employers are already adapting their payroll systems and classification strategies to avoid the costly pitfalls that come with California’s aggressive wage enforcement. Here’s what you need to know to stay compliant and competitive.
Key Takeaways
- Minimum wage laws in California are changing at multiple levels, and employers are responsible for keeping up with all of them: statewide, locally, and by industry.
- Noncompliance can lead to serious consequences, including back pay, penalties, and legal exposure.
- Staying compliant is easier with the right systems in place, especially tools that automate rate tracking, documentation, and updates.
Overview of California’s 2025 Minimum Wage Landscape
California’s minimum wage structure has evolved into one of the most complex in the nation, with multiple overlapping requirements that vary by location, industry, and employer size.
Key Requirements:
- Statewide minimum: $16.50/hour for all employers (January 1, 2025)
- Fast food chains: $20.00/hour (60+ locations nationally)
- Healthcare facilities: $18.63-$24.00/hour depending on facility type
- Local ordinances: 30+ cities exceed state minimum, ranging up to $25.00/hour
The critical rule: employers must always pay the highest applicable rate. A healthcare worker in San Francisco, for example, earns the higher of the city’s $19.18 minimum wage or their facility’s healthcare-specific rate.
California Minimum Wage Increases: Updated Salary Thresholds for Exempt Employees
Every minimum wage increase in California triggers a chain reaction on exempt employee salaries, catching many employers off guard when their previously exempt managers suddenly qualify for overtime.
Current Exempt Salary Requirements:
- Executive, Administrative, Professional: $68,640/year (2× state minimum wage)
- Computer Software Professionals: $118,657.43/year or $57.05/hour
Here’s the sneaky part: these calculations use only the state minimum wage of $16.50 per hour, not local or industry-specific rates. A fast food manager in Los Angeles still needs only $68,640 annually to qualify as exempt, despite the $20 hourly minimum for non-exempt fast food workers.
Of course, misclassification carries steep consequences. The California Labor Commissioner can impose penalties of $5,000-$15,000 per violation, plus back wages, overtime, and interest. In other words, one misclassified employee can easily cost six figures in penalties and settlements.
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Industry-Specific Minimum Wage Requirements
California has also created separate minimum wage tiers for industries labeled essential or vulnerable, overriding the state baseline with much higher requirements.
Fast-Food Restaurants
The fast food minimum wage jumped to $20.00 per hour on April 1, 2024, affecting chains with 60 or more locations nationally. This covers all non-exempt employees, not just food service workers but also maintenance staff, cashiers, and shift supervisors.
Key compliance points:
- Applies to integrated enterprises reaching 60-location threshold
- Includes franchisees of qualifying chains
- Covers all work performed at covered establishments
Healthcare Facilities - Minimum Wage Increases by Tier
Healthcare employers must deal with a two-tier system as of July 1, 2025:
Tier 1 - Large Systems ($24/hour as of July 1, 2025):
- Health systems with 10,000+ full-time employees
- Dialysis clinics
- Large county-run facilities
Tier 2 - Safety Net/Rural ($18.63/hour as of July 1, 2025):
- Hospitals with high Medicare/Medicaid patient mix
- Rural healthcare facilities
- Facilities in counties under 250,000 population
The healthcare minimum wage applies very broadly. Janitors, food service workers, and administrative staff at covered facilities all qualify, not just clinical employees.
Hotel and Airport Workers
The hospitality industry faces an incredibly complicated patchwork of local requirements, with Los Angeles leading the push toward “Olympic wages” ahead of the 2026 World Cup and 2028 Olympics:
Current Hotel Worker Rates:
- Los Angeles (60+ rooms): $21.01/hour
- West Hollywood: $20.22/hour
- Santa Monica: Matches LA rates
Airport Workers:
- LAX Service Workers: $19.28 with health benefits / $25.23 without
- Additional training requirements under LA’s Olympic wage proposal
Local Minimum Wage Ordinances (Post-July 2025)
California’s cities and counties have embraced their authority to exceed state minimum wage requirements, creating another tangled knot of local ordinances that change mid-year.
Highest Local Rates:
- Emeryville: $19.90/hour
- Berkeley: $19.18/hour
- San Francisco: $19.18/hour
- West Hollywood: $19.65/hour (non-hotel employees)
Major Metro Areas:
- Los Angeles (city): $17.87/hour
- Los Angeles County (unincorporated): $17.81/hour
- San Diego: $17.25/hour
- San Jose: $17.95/hour
- Oakland: $16.89/hour
Additional Cities Above State Minimum:
- Pasadena: $18.04/hour
- Santa Monica: $17.81/hour
- Fremont: $17.75/hour
- San Mateo: $17.95/hour
- Palo Alto: $18.15/hour
- Mountain View: $19.20/hour
- Sunnyvale: $19.00/hour
- Santa Clara: $18.20/hour
- Alameda: $17.50/hour
- Hayward: $17.36/hour
- Milpitas: $18.20/hour for large employers
- Redwood City: $18.20/hour
- San Carlos: $17.25/hour
- Daly City: $17.07/hour
- South San Francisco: $17.70/hour
- East Palo Alto: $17.25/hour
- Los Altos: $18.15/hour
Remember: these rates apply based on where employees perform work, not where your company is headquartered. So, a San Francisco company with employees working in Oakland pays Oakland’s rate for that location.
Multi-Jurisdiction Employer Compliance Challenges
As you might’ve guessed, operating across multiple California jurisdictions can turn wage compliance from a straightforward calculation into a marathon tracking exercise that really requires capable tech to successfully address at this point.
Key Compliance Scenarios
Multi-jurisdiction employers face unique challenges that single-location businesses never really encounter:
Mobile Workers: Employees who travel between locations during their shift must receive the highest applicable rate for all hours worked. Therefore, a delivery driver starting in Pasadena ($18.04) and delivering to Los Angeles County ($17.81) earns the Pasadena rate for the entire shift.
Remote Workers: The physical location where work is performed determines the applicable minimum wage. That’s why remote employees working from home in Berkeley earn that city’s $19.18 rate, even if the employer is based in a lower-wage jurisdiction.
Split Operations: Businesses with locations in multiple jurisdictions must maintain separate wage structures. For example, a restaurant chain with locations in San Francisco, San Jose, and Fremont needs three different starting wage scales.
Managing Wage Increases Across Multiple California Jurisdictions
Obviously, successful multi-jurisdiction compliance requires systematic tracking of rate changes across all operating locations. To just cover the basics, employers should:
- Create jurisdiction-specific compliance calendars (many cities update rates on July 1)
- Monitor pending legislation in each city/county of operation
- Track employee movement between locations for accurate wage calculation
- Maintain separate posting requirements for each physical location
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Common Multi-Jurisdiction Pitfalls
But keeping up to date with such a dynamic set of laws is easier said than done. According to the California Labor Commissioner, these are the most common multi-jurisdiction mistakes:
- Using headquarters location for all employees: Remember, your Palo Alto headquarters doesn’t set wages for your San Diego workers. Instead, each location’s local rate applies.
- Missing mid-year increases: Again, unlike the state’s January 1 increase, cities like Los Angeles, Berkeley, and Santa Monica update rates on July 1.
- Averaging rates across locations: Employees earn the applicable rate for each hour worked. Thus, you cannot average rates across a pay period.
- Ignoring industry-specific overlays: A hotel in Long Beach must pay $25.00/hour, not the city’s general minimum wage.
Technology Solutions for Multi-Jurisdiction Compliance
Needless to say, manual tracking of multiple wage rates just begs for errors and penalties. Thankfully, modern compliance technology offers:
- Automated rate updates pushed directly to payroll systems
- Geofencing capabilities to track mobile worker locations
- Real-time rate lookups by address or ZIP code
- Integrated posting management for required notices
- Audit trails documenting rate applications
Tools like Mosey handle the tedious, error-prone tasks that often cause compliance issues, helping employers stay accurate and up to date without the manual scramble.
The True Cost of California Minimum Wage Noncompliance
California’s eagle-eyed enforcement makes wage violations particularly expensive, with penalties designed to encourage voluntary compliance through deterrence.
Direct Financial Penalties:
- Unpaid wages: Full back pay plus up to 25% penalties
- Waiting time penalties: Up to 30 days of wages for late final paychecks
- PAGA penalties: $100 per employee per pay period (first violation), $200 for subsequent
- Wage statement violations: $50 per employee (first violation), $100 for subsequent
Ongoing Consequences:
- Class action exposure: One violation can trigger claims for all employees
- Criminal prosecution: Willful violations can lead to misdemeanor charges
- Business license revocation: Cities can suspend operating permits
- Reputational damage: Public wage theft databases and media coverage
Consider this real-world scenario: A 50-employee company underpaying by just $1 per hour faces potential liability exceeding $400,000 annually when factoring wages, penalties, and legal costs. Yes, that’s a lot.
Employer Action Checklist for CA Minimum Wage Compliance
Ultimately, comprehensive wage compliance requires both immediate corrections and ongoing monitoring systems. Here are a few best practices for both to get you started.
Immediate Actions Required:
Audit Current Rates: Review all work locations against current minimum wage requirements. Don’t assume last year’s rates still apply—many jurisdictions increased rates on July 1, 2025.
Update Payroll Systems: Ensure your payroll software reflects current rates for each location. Manual overrides invite errors.
Review Exempt Classifications: Verify all exempt employees meet the new $68,640 annual salary threshold (or $51,480 for inside sales).
Post Required Notices: Each jurisdiction requires specific postings. Los Angeles, San Francisco, and San Diego all have unique notice requirements beyond state postings.
Ongoing Compliance Measures:
Create Compliance Calendars: Track rate increase dates for all jurisdictions—January 1 (state), July 1 (most cities), and various other dates for specific locations.
Train Management Teams: Supervisors must understand which rates apply to mobile workers and how to track multi-jurisdiction time.
Implement Location Tracking: Whether through geofencing or manual logs, document where employees perform work.
Schedule Regular Audits: Quarterly reviews catch classification errors before they become class action lawsuits.
Documentation Requirements:
California requires meticulous record-keeping to defend against wage claims:
- Accurate wage statements showing applicable rates by location
- Time records documenting work location for mobile employees
- Updated hire notices (Labor Code 2810.5) with current wage information
- Proof of posting for all required notices at each location
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Mosey Keeps You Compliant in California
California’s minimum wage laws never sit still. So, as rates continue to rise at the state, local, and industry level, the pressure on HR and payroll teams will only increase. Staying accurate means more than just knowing the numbers. It means applying the right rate, in the right place, for the right employee, every single pay period.
That’s where Mosey comes in. Mosey helps employers stay aligned with employment laws like wage requirements across jurisdictions, roles, and pay structures, all without chasing down updates or building workarounds. It’s the beauty of automation and a system smart enough to keep your team ahead of every rate change, without the manual lift.
Want to see for yourself? Book a free demo today to see how Mosey can make wage compliance easier, faster, and far less stressful than you thought possible.
FAQ: New California Minimum Wage Laws
California employers are expected to follow state, local, and industry-specific wage laws—many of which changed recently. Here are answers to some of the most common questions.
Is 32 hours full-time in California?
No, 32 hours is not automatically considered full-time in California. Full-time status depends on the employer’s policy unless a specific law or benefit rule applies.
Who is affected by the $20 minimum wage in California?
The $20 minimum wage in California applies to fast-food workers at chains with at least 60 locations nationwide. This rate was introduced under AB 1228 and took effect in April 2024.
What is the exempt salary in California 2025?
The exempt salary threshold in California for 2025 is tied to the state minimum wage and must meet a specified annual minimum. This applies to administrative, executive, and professional employees classified as exempt.
What is the new minimum wage law in California?
The new minimum wage law in California raised the statewide hourly minimum to a higher baseline and introduced special rates for fast-food and healthcare workers. Employers must also follow higher local wage ordinances where applicable.
Who is exempt from $20 minimum wage in California?
Workers outside qualifying fast-food chains are exempt from the $20 minimum wage in California. Most employees in other industries follow the regular state or local minimum wage.
Will California’s minimum wage increase in 2026?
Yes, California’s minimum wage is expected to increase again in 2026 based on inflation adjustments. The exact rate is set annually and capped by state law.
What is the living wage in California?
The living wage in California varies by region but is generally higher than the state minimum wage. It reflects the income needed to cover basic expenses like housing, food, transportation, and healthcare.
