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California Set To Increase Minimum Wage to $15.50 on January 1, 2023

by Jennifer Grady, Esq.


Due to rising inflation rates, the minimum wage is set to increase in California to $15.50 per hour, for all employees, ahead of schedule, on January 1, 2023. Effective January 1, 2017, the minimum wage for all industries will be increased yearly. From January 1, 2017, to January 1, 2022, the minimum wage will increase for employers employing 26 or more employees. This increase will be delayed one year for employers employing 25 or fewer employees, from January 1, 2018, to January 1, 2023. The scheduled increases may be temporarily suspended by the Governor, based on certain determinations. This increase is 50 cents more than the scheduled increase for 2023.


Governor Gavin Newsom announced the new schedule on May 12, 2022, with reference to Section 246 of the California Labor Code, which specifies that the state’s existing minimum wage law be increased “when inflation exceeds 7 percent.”


Inflation rates have been exacerbated by supply chain disruptions and labor shortages due to the COVID-19 pandemic. Currently, the costs of automobiles, gasoline, fuel, food, and other goods are at an all-time high. Recently, the Consumer Price Index increased 8.5 percent between March 2021-2022, the highest increase since 1981.


California leads the country’s statewide minimum wage with $15 per hour, but local counties and cities can set their own minimum wages at a higher rate than the state. Los Angeles is slated to do just that by increasing their minimum wage to $15.96 per hour starting on July 1, 2022. The City of West Hollywood will be increasing their minimum wage to $16.00 per hour on July 1, 2022, with plans already in place to increase again to $17.00 per hour on January 1, 2023.


There are over 22 cities and countries in California with minimum wages that are higher than the state rate. Please check with each city in which your employees work to ensure that you have calculated the changes to the minimum wage correctly.


For assistance with questions about the new minimum wage, or maintaining employees’ exempt status, schedule a consultation with The Grady Firm’s attorneys, or call 949-798-6298.

To learn more about ensuring your business is compliant with state and local laws, schedule a complimentary 15-minute consultation with The Grady Firm’s attorneys; call +1 (949) 798-6298; or fill out a Contact Request Form.


As outside counsel for growing and international companies with a presence in California, The Grady Firm attorneys provide the following services;

  • Assistance with interpreting emergency COVID-19 legislation as it affects your business;

  • Counsel employers on staff changes and draft Notices of Reduced Hours, Furloughs, or Layoffs;

  • Draft Severance Agreements;

  • Act as I-9 agent and I-9 audit preparation or defense;

  • Employee v. independent contractor classification analysis;

  • Assistance with converting independent contractors to employees;

  • On-site, classroom-style Sexual Harassment training for employees and supervisors;

  • “Experiential” supervisor training in which managerial employees practice processing a harassment complaint and commencing an investigation in pairs with other trainees.

  • Draft and review Employee Handbooks, arbitration agreements, and Anti-Harassment policies;

  • Employee personnel file audits;

  • Litigation/labor claim defense.

The firm’s attorneys are licensed to practice employment law in California.

This article is for informational purposes only, and does not constitute legal advice or create an attorney-client relationship. This article does not make any guarantees as to the outcome of a particular matter, as each matter has its own set of circumstances and must be evaluated individually by a licensed attorney.