With state minimum wages changing on almost a yearly basis in California, it is important to remember what minimum wage is. While there are some exceptions, most California employees must be paid at least the minimum wage. Minimum wage is the set minimum hourly rate an employee is required by law to receive.
Preliminary Information:
- There are established federal and state minimum wages.
- State minimum wage cannot be lower than the federal minimum wage.
- Minimum wage cannot be waived, nor can a lower amount be agreed to in a collective bargaining agreement.
How to determine applicability of minimum wage:
- Statutory Minimum wage – Federal or State?
- Federal: As of July 24, 2009, the federal minimum wage is $7.25/hour.
- California: As of January 1, 2022, California minimum wage for employers of 26 or more is $15.00 per hour; employers with 25 or fewer employees is $14.00 per hour. In California, local regulations may provide higher minimum wage such as in San Francisco. However, the local regulations are usually very restrictive and do not apply to all employers.
- Do any subminimum wages apply?
- This only applies to certain categories of employees and for the subminimum wage to apply the employee must fall under a category under both federal and state law.
- Examples:
- Federal:
- “Opportunity Wage” for newly hired employees under age 20 (first 90 calendar days of employment).
- Learners, apprentices, and students
- Messengers
- Disabled employees (certification required for employees whose earning or productive capacity is impaired by age, physical, or mental disability or injury)
- California:
- Learners, apprentices
- Minors
- Disabled employees
- Do any credits apply?
- Federally and state allowed reasonable deductions of certain amounts of employee’s earnings. Federal credit rates may be set by the Secretary of Labor and when established must be followed. State rates are set by the Department of Industrial Relations.
- Examples:
- Federal
- Meals, lodging, fuel, transportation, and general merchandise
- Tips, under certain circumstances
- State
- Meals, lodging
- Note: California does not allow a tip credit
- Is the employee entitled to a split-shift premium?
- A split shift is a work schedule that is interrupted by non-paid work periods established by the employer that is not a rest or meal break. If an employee works a split shift than at least one hour of pay must be paid at minimum wage in addition to the minimum wage for that workday.
Thus, while minimum wage seems like a straightforward right for employees, there are some nuances to keep in mind. When in doubt, review the mandated posted notices of various employment rights, which include minimum wage requirements.