Minimum Wage Laws in California

If you believe you are getting paid below minimum wage, call us at 888-762-0297 to discuss your case.

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If you live in Los Angeles and everywhere else in Southern and Northern California, we can help you.

What is a minimum wage?

A minimum wage is the lowest hourly rate that an employee can be legally paid. The rate is set by both state and federal laws. States are free to set a minimum wage that is higher than the minimum wage under federal law, but they cannot set a minimum wage that is less than the federal minimum. Many cities in California - including Los Angeles - also set their own minimum wages. These local minimum wage ordinances must also provide pay that is at least as much as the current state and federal minimum wages.

Minimum wage under federal law

Currently, the federal minimum wage is $7.25 per hour. This has been the subject of much recent controversy. The rate has not been raised in many years, and critics claim that this wage has not kept pace with the rising cost of living. If the federal minimum wage is raised, states will have to be sure their own rates are at least as high as the new federal minimum.

Minimum wage under California law

Here in California, where the cost of living is relatively high, the state legislature tends to raise the minimum wage more frequently. It is currently set at $14 per hour. (Small businesses with 25 or fewer employees may pay $13 per hour.) This means that any California employer must pay all employees a minimum of $14 (or $13) per hour, even though these wages are higher than the federal minimum wage. Employers must also keep up with the frequent changes to California's minimum wage law. Employers who are not aware of changes to the minimum wage can still be fined for failing to comply with it. They can also be fined for failing to comply with local ordinances that set minimum wages in cities and counties throughout California. As of July 2021, the minimum wage in the City of Los Angeles is $15 per hour.

Who enforces minimum wage laws?

In California, employment matters are overseen by the Department of Industrial Relations. The Labor Commissioner's Office handles wage disputes. Employees can file their own claims with this Office, but they have a better chance of success when they have an attorney on their side. Remember: an employee must fight against the employer, an HR department, and even a legal department or attorney. You do not have to go up against them on your own.

Who is exempt from minimum wage laws in California?

Employees who are paid on a salary basis instead of an hourly rate can be exempt from California's minimum wage laws. However: even these "exempt" employees must be paid a minimum salary. A minimum weekly salary is determined by calculating doubling the minimum wage and multiplying that sum by a 40-hour week. Using the current minimum wage of $13 per hour, the minimum salary would be:
(2 * $13) * 40 = $1040 per week, $54,080 per year, or $4,506.67 per month.
Salaried employees who have been incorrectly classified as exempt could be entitled to back pay for unpaid wages, unpaid overtime wages, premium wages for missed meal periods and missed rest breaks, and other financial losses.

How often does California raise the minimum wage?

There is no set schedule for increasing the minimum wage in California. This is why employers must be diligent about updates in the law. In 2016, a minimum wage bill provided for increases of $1 per hour every year through 2022. Even this could change, though, because the bill also contained a provision for the governor to suspend these increases if economic conditions could not support them.

Minimum wage for small business owners in California

The 2016 minimum wage law also allowed for a slightly lower minimum wage to be paid by employers who have 25 or fewer employees. This was generally $1 less per hour than the minimum wage for businesses with 26 or more employees. As of 2021, the minimum wage for small businesses (with 25 or fewer employees) is $13 per hour.

Minimum wage for tipped employees in California

Here in California, employers may not use tips as a credit toward the minimum wage. This means that servers, bartenders, hotel employees, and others who customarily receive tips must still be paid $13 or $14 per hour.

Do minimum wage laws cover workers misclassified as independent contractors?

California's minimum wage laws do not apply to independent contractors. However, if your employer has wrongfully classified you as an independent contractor to avoid paying you the minimum wage, you are entitled to back pay – including unpaid minimum and overtime wages and premium wages for missed meal periods and missed rest breaks.

If you believe you may have been misclassified as an independent contractor, call us at 888-762-0297 to discuss your situation.

Can you agree to work for less than minimum wage?

No. The legislature has the authority to enact laws to remedy unfair pay. These laws become an obligation of the employer, and the obligation cannot be waived by an employee. For further information, call our office.

Common minimum wage violations in California

An employer might violate minimum wage laws by:

• Refusing required overtime pay
• Paying overtime hours at the regular hourly rate instead of the increased overtime rate required by law
• Failing to pay the correct overtime rate to employees who also earn commissions, bonuses, or other incentive pay
• Wrongfully classifying employees as independent contractors
• Wrongfully classifying hourly workers as exempt employees who are paid a salary
• Trying to use tips to offset the employee's hourly wage
• Making illegal deductions from the employee's paycheck
• Trying to discipline an employee by withholding wages

These are just some of many ways an employer can violate minimum wage laws. If you believe your pay has dropped below minimum wage for any reason, be sure to consult with a Los Angeles employment lawyer about your legal rights.

What to do if you are paid below the minimum wage

There are several ways to respond to a minimum wage violation. Some employees confront their employers directly and demand a minimum wage. This can be difficult, as most employers do not want to admit they are in violation of employment laws and may even try to illegally retaliate against you. An employee may also file a complaint with the Department of Industrial Relations. (The Labor Commissioner's Office handles these complaints.) The best way to protect your legal rights is to consult with an employment attorney before taking any action. An experienced minimum wage lawyer will be able to develop the best strategy for confronting the employer, filing a complaint with the Labor Commissioner, or filing a lawsuit against your employer.

What is the time limit to bring a minimum wage lawsuit?

The time limit to file a lawsuit depends upon the nature of the claims, but generally, the statute of limitations is usually between one and four years. For more information, call our office.

Penalties available for California minimum wage violations

California law provides a penalty for employers who violate minimum wage laws. This is a fine of $100 for the first violation and $250 for each subsequent violation. In a lawsuit, an employer may also be ordered to pay you back wages with interest, liquidated damages, attorney's fees, and the cost of filing your lawsuit. Experienced employment lawyers know how to find all compensation their clients are entitled to for minimum wage violations.

For more information

To discuss your case, call us at 888-762-0297 and ask to speak with an attorney who handles minimum wage cases.

Consultations are free.

We represent clients in Los Angeles and other cities in California.

Last updated on October 1, 2021.

Additional Resources

• Labor Commissioner's Office handles minimum wage disputes