California minimum wage increases to USD 16.50 per hour

California's state minimum wage will increase to USD 16.50 per hour, affecting all employers operating in the state. The new rate represents an increase from the current minimum wage and applies to all non-exempt employees across California.

Who is affected

This change affects all employers in California, regardless of company size or industry. All non-exempt employees working in the state must be paid at least USD 16.50 per hour once the new rate takes effect. This includes full-time, part-time, and temporary workers who are not classified as exempt under California wage and hour laws.

What's changing

California employers must increase their minimum wage rate from the previous level to USD 16.50 per hour for all non-exempt employees. This applies to the base hourly rate before any overtime calculations or additional compensation.

Employers should note that some California cities and counties maintain local minimum wage ordinances that exceed the state rate. In those jurisdictions, employers must pay whichever rate is higher.

What NEO partners and clients should do

• Update payroll systems to reflect the USD 16.50 per hour minimum wage rate for all California-based non-exempt employees before the effective date
• Review current employee compensation to identify any workers earning below the new minimum and adjust their pay rates accordingly
• Verify local ordinances in cities where you employ workers, as some California municipalities require higher minimum wages than the state rate
• Update employment contracts and offer letters to ensure new hires in California receive compliant wage rates

Sources

• California Department of Industrial Relations, Division of Labor Standards Enforcement: https://www.dir.ca.gov/dlse/minimum_wage.htm