California Minimum Wage Increases in 2021

California was the first state to commit to increasing the minimum wage for employees to $15 per hour. The minimum wage increase began on January 1, 2017, and increases annually based on the size of the company. By January 1, 2023, almost all employees in California will be earning a minimum of $15 per hour. There are exceptions for some employees. 

For example, learners are paid no less than 85 percent of the minimum wage rounded to the nearest nickel during the first 160 hours of employment. Learners are individuals who accepted jobs in occupations or industries in which they have no previous work experience. There are also exceptions for individuals with physical or mental disabilities and non-profit organizations that employ disabled workers. 

It is also important to note that local cities and counties have the right to enact ordinances that establish higher minimum wage rates for employers in their jurisdictions. Several California cities and counties have enacted such ordinances to raise their minimum beyond the state minimum.

Employers must follow the law that is most beneficial to their employees. Therefore, if the local ordinances provide the highest minimum wage rate, that is the rate that employers within that jurisdiction must pay to non-exempt employees.

What is the Current Minimum Wage in California in 2021?

As of January 1, 2021, the minimum wage for large companies is $14 per hour. Large companies are defined as having 26 or more employees. The minimum wage for small companies is $13 per hour. A small company has 25 or fewer employees.

On January 1, 2022, large companies will be required to pay $15 per hour for minimum wage. Small businesses will reach the $14 per hour minimum wage rate effective the same date. As of January 1, 2023, all companies will pay a minimum wage of $15 per hour unless local ordinances provide higher rates.

Can an Employee Waive Minimum Wage Requirements to Get a Job?

No, it is against public policy for a worker to agree to provide services for less than minimum wage, according to California Civil Code §1668 and §3513.

Allowing employees to waive their right to the minimum wage would defeat the purpose of enacting minimum wage laws. Employers would merely hire employees who agreed to work for less money. The result would be a massive decrease in the pay received by workers throughout all industries. 

What Should an Employee Do if an Employer Refuses to Pay Minimum Wage?

The employee can file a wage claim with the Division of Labor Standards Enforcement. You must provide documentation to support your wage claim. Supporting documents may include copies of pay stubs or paychecks, time records, bounced payroll checks, collective bargaining agreements, and forms or worksheets related to irregular hours, commissions, unpaid vacation, and unreimbursed business expenses. 

Most wage claims are set for a settlement conference. You must attend the settlement conference, as does your employer. A deputy labor commissioner works with you and your employer to resolve the wage dispute. If you cannot reach a settlement, a wage claim hearing is scheduled.

Both sides have the chance to present testimony and evidence during the hearing. The hearing officer considers only evidence and testimony presented during the hearing. The hearing officer has 15 days to make a decision. Either party may appeal the decision of the hearing officer if they are unhappy with the decision.

Refusing to pay minimum wage is considered wage theft. Employers can be held liable for damages caused by wage theft and face strict penalties for violating minimum wage laws. In addition to refusing to pay minimum wage, other wage theft offenses could give rise to a wage claim.

Examples of wage theft include, but might not be limited to:

  • Employers refusing to allow employees to take rest breaks, meal breaks, and preventative cool-down breaks
  • Failure to reimburse an employee for business expenses
  • Failing to pay an employee required overtime pay
  • Not being allowed to use paid sick leave
  • Employers failing to pay promised bonuses or vacations
  • Managers or owners taking tips
  • Not being paid premiums for split shift work
  • Employers making unauthorized deductions from paychecks
  • Not receiving final wages according to the deadlines set by statute

A California wage and hours dispute attorney can help review your case and advise you of your options and legal rights regarding wage theft. You may also have the right to file a civil lawsuit against your employer.

There are pros and cons for each choice that you should review with an employment law attorney before deciding how to proceed. In addition, there are deadlines for filing claims and lawsuits, so don’t delay in contacting an attorney for legal advice.