California State Minimum Wage by City in 2025

California doesn’t have just one minimum wage—it has many.

The state of California has several minimum wage laws that can often be confusing and overwhelming for businesses. In California, the minimum wage is determined by a law that links it to the cost of living. In other words,  the wage increases along with inflation so workers always earn a fair wage that can help them afford to live in the state.

Employers in California don’t just have to worry about federal and state minimum wages; they’re also subject to dozens of local minimum wage ordinances. Many cities and counties across the state have legislated their own minimum wage laws that are even higher than federal or state minimum wage.

These local minimum wages typically increase on an annual basis, based on inflation as measured by the local Consumer Price Index (CPI). ). Some municipalities also specify a separate, lower minimum wage law for small businesses. . On or before August 1 of every year, the California Director of Finance determines if the minimum wage will increase based on the rate of inflation. 

What is the Minimum Wage in California?

Beginning January 1, 2025, the minimum wage rate for all hourly employees in California will be $16.50/hour, regardless of company size. The minimum base wage for exempt employees increases to $68,640/year. There is no separate minimum wage for tipped employees.

There are exceptions to this minimum wage. Fast food restaurant employees who work for an employer with 60 or more restaurants nationally make a minimum wage of $20/hour. Certain health care facility workers have a minimum wage between $18 and $24, depending on the type of facility.

Local regulations add yet another layer of complexity to California’s labor laws. If you operate in more than one location, you could be subject to multiple minimum wage levels in a single day. Get your calculations wrong and you face the prospect of wage and hour lawsuits.

To help your organization stay compliant with the latest minimum wage requirements, Paycor created this chart of California minimum wages by city and county.

Please note that although the California minimum wage is $16.50/hour, the federal minimum wage is still just $7.25/hour.

In certain jurisdictions, nonprofits are exempted or subject to a lower minimum wage. Exemptions or reductions may also apply to younger exempt employees classified as ‘learners’. Additionally, there may be higher minimum wage levels for workers in certain fields, like healthcare and the automotive industry. Unlike some states, California does not allow employers to take tip credits, and so there is no separate tipped minimum wage.

How Should Small Business Owners Prepare for Minimum Wage Increases?

While minimum wage increases may pose a challenge for small businesses, there are some benefits. A recent study published in the Review of Economic Studies found an increased minimum wage leads to a rise in employment. For example, California’s fast food industry added 11,000 new jobs in the four months following Governor Gavin Newsom signing the fast food minimum wage increase into law.

There are ways to stay ahead of the curve when it comes to minimum wage increases. By keeping up to date on changes to the minimum wage, small businesses can adjust prices and compensation accordingly and avoid being caught off guard.

If a minimum wage increase is on the horizon, it’s important to look at your budget and financial records. Reviewing operational costs in detail can help you prepare for the change. Make sure to go over all your employees’ wages ­– not just the ones who get a boost from new minimums. These new laws might close the gap between hourly employees and your more senior staff, which could impact the work environment.

To stay compliant, you may need to make some serious financial decisions. That could mean layoffs, increasing prices, or rethinking your hours of operation. Whatever you decide, it’s important to keep your team informed.

Making sure professional employees are aware of the changes and how they may be affected can help minimize the impact on your business. Finally, communicating with customers about any price changes can ensure they understand and are prepared for what’s coming.

How Paycor Helps

The good news is that Paycor can help you stay compliant, wherever you are in the country. Our system tracks all relevant legislation – even if employees work in multiple locations with vastly different minimum wage levels. We’ll alert you if an employee’s pay is ever set below the allowed level for a given location.

This way, you can be confident that your employees are always getting the pay they deserve, no matter where they work. And as minimum wage levels change, you’ll be one of the first to know, so you can adjust employee pay rates accordingly.

To learn more about how Paycor can help you stay compliant, save time, and make better business decisions, take a guided software tour.

Frequently Asked Questions

Have more questions related to wage requirements in California? Read on.

What is the California Minimum Wage for 2025?

Starting on January 1, 2025, the statewide California minimum wage will be $16.50 per hour for all employer sizes. However, different cities can create minimum wage laws that are higher than the state minimum wage.

Because the cost of living in California is quite high, especially in major cities like San Francisco and Los Angeles, workers need to be paid a higher wage to afford the same standard of living as someone in a less expensive area. The minimum wage allows workers to earn a livable wage and helps reduce income inequality.

What is a Good Hourly Wage in California?

The Department of Urban Studies and Planning at MIT put together what they find to be a living wage, a poverty wage, and the minimum wage for various states based on family size with their living wage calculator. It’s important to note that their data is updated each January, and these numbers won’t reflect more recent changes, like inflation.

According to MIT’s research, a single person in California who made $27.32/hour in January, 2024 was making a “living wage.” This is compared to the 2024 $16.00/hour minimum wage, and a poverty wage of $9.83/hour.

For two adults living together with just one of them working, a living wage is $36.35/hour, compared to the $16.00/hour minimum wage, and $8.80/hour poverty wage.

For two adults living together who both work, a living wage is $18.17/hour, vs. $16.00/hour minimum wage, and $4.91/hour poverty wage.

These are all based on having no children, and the 2024 minimum wage of $16.00/hr, which will rise to $16.50/hour on January 1, 2025.

If you have children, then the living wage calculation changes based on the number of children, and how many adults in your household are employed.

What are Full-Time Hours in California?

Full time is defined as 40 hours/week by California Labor Code. It’s up to the employer though, and some employers may classify fewer hours as full time. Per the Affordable Care Act, anyone working 30 hours or more per week at an employer with 50 or more employees is eligible for benefits in California.

Can A Person Live in California on $50k a Year?

Living in California on $50,000 per year is not going to be easy. The high costs and the state’s relatively high income tax rate means that a person would have to make some sacrifices to make ends meet.

Most of the state is very expensive, and even with a decent salary, it would be difficult to cover all of the costs. On a budget of $50,000 per year, it may be wise to look for more affordable areas. Places like Sacramento or Riverside might be good options, as the cost is lower than in other parts of the state.

You could also get a higher paying job which would give you more money to work with each month. Or you could get a job that offers premium wage rates for working holidays or odd hours.

In general, living in California is more expensive than living in other parts of the country. However, there are many ways to save money if you are willing to be creative. With a little bit of planning, a person could live comfortably on $50,000 per year in California.

How are Local Minimum Wage Rates Determined and Updated?

Local minimum wage rates in California are determined and updated based on ordinances enacted by individual cities and counties. These local governments set their own minimum wage rates, which are often higher than the state-mandated minimum wage. Factors that influence the determination and updating of these rates include local economic conditions, cost of living adjustments, and public policy goals.

What are the Penalties for Non-Compliance with Minimum Wage Laws in California?

An employer who doesn’t appropriately pay an employee faces a penalty of $50 for each underpaid pay period in addition to backpay to cover the difference between what the employee was paid and should have been paid.

For more information, check out our California HR compliance webinar.