Staying compliant with California’s evolving minimum wage laws is essential for businesses. With federal, state, local, and industry-specific requirements, how can you ensure you’re paying employees correctly? This guide breaks it down for you.

What is California’s Minimum Wage in 2025?

As of January 1, 2025, the California minimum wage is $16.50 per hour for all nonexempt (hourly) employees. Employers must comply with this rate, which is significantly higher than the federal minimum wage of $7.25 per hour.

In the November 2024 election, voters rejected Proposition 32, which aimed to accelerate future minimum wage increases.

Do Industry-Specific Wages Apply to Your Business?

Certain industries in California have higher minimum wage requirements:

• Fast food workers: $20 per hour

• Health care workers: Between $18 and $23 per hour, depending on the type of facility

If your employees fall into these categories, you must follow the industry-specific wage instead of the standard state minimum.

How Do Local Minimum Wage Laws Affect You?

Many California cities and counties have enacted local minimum wage laws, which apply based on where an employee works, not where your business is located. This means:

• Remote employees must be paid according to the local wage where they work.

• Employees at client sites must be paid based on that location’s wage ordinance.

Key Compliance Tips for Employers

• Follow the highest wage law that applies—federal, state, industry-specific, or local.

• Verify industry-specific wages if you employ fast food or health care workers.

• Check local wage laws for employees working remotely or off-site.

• Stay updated on future wage increases to avoid compliance issues.

Need Help Navigating Wage Laws?

Understanding California’s complex wage laws is crucial to avoiding penalties and ensuring fair pay. Consult HR Services can help you stay compliant—reach out today!