Understanding California’s New Pay Scale: 5 Major Impacts of the July 1st Minimum Wage Rise

1 Local Minimum Wage Increases

As noted above, cities and counties are permitted to set their own minimum wage, provided it’s at least equal to the state of California’s minimum. Starting on July 1, 2023, many places in California did this.

Why pay more than the required state minimum? It helps retain employees and recruit new ones. Workers have a better chance to keep up with the cost of living, especially given recent inflation, when they are paid a decent wage. Some employers pay more than the minimum wage everywhere in order to attract workers.

Below are the changes effective July 1 in California.

2 Posting of Minimum Wage in a Prominent Place

Employers are required to post the minimum wage for their locality in a prominent spot in the workplace where all workers can see it.

If they use the California-wide minimum wage, it should be posted as $15.50 until January 2024, when the rate goes up again. If they use a local variation of the wage according to the chart above, that is the rate that should be posted.



It’s worth noting that employers cannot deny a worker the minimum wage based on their age, race, or other protected status. Also, they must pay all workers the proper minimum wage regardless of their immigration status. Some companies try to get around this by paying employees “under the table” (off the record), but this is illegal.

3 Minimum Wage Increases and Overtime Pay

The minimum wage you are paid affects your overtime pay, as it is based on your regular hourly pay. How does overtime work in California?

Unless you are an exempt employee, the state of California considers a workday eight hours and a workweek six days or less. If you work more than eight hours in a workday or more than 40 hours in a workweek, you should be paid time-and-a-half for the extra time.

For instance, if you make $16.78 per hour in the City of Los Angeles and work 10 hours to help your boss out with a seasonal rush, you have worked two extra hours that deserve overtime pay. For those hours, you should be paid $25.17 per hour.

What if you work a lot of extra overtime in a week, say, if a coworker is out sick and you’re covering for them alongside your own duties?

If you work more than 12 hours in a workday or more than eight hours on the seventh consecutive day of work, you must be paid double time for the extra time.

So, if you put in 14 hours during a super busy day, the time between eight and 12 hours is paid at time-and-a-half. The extra two hours over 12 are paid at twice your wage.

4 Unpaid Wages After July 1

Does your employer owe you money? First of all, unpaid wages are a form of wage theft. You can speak with an employment attorney if you are not being paid appropriately by your employer.



Second, know that any money you are owed for work performed on or after July 1, 2023, must be paid at the new minimum wage if you work in one of the places on the chart above. And any overtime you are due must also be calculated using the new minimum wage.

5 Remote Workers in California

What about remote workers in California? If you are an employee and not an independent contractor (aka 1099 worker or freelancer), you must be paid the minimum wage for the place where you do the work.

That means if your company is headquartered in another state with a lower minimum wage, they still have to pay you the California minimum wage – or the wage for your locale on the chart above if it applies to you. In this case, they don’t get what’s called a choice of law, meaning they can’t decide to use another state’s law to determine your wages.

That brings up another issue: 1099 misclassification. An employer can’t call you an independent contractor when you’re really an employee just to get away with avoiding the minimum wage and coerce you into taking less as a freelancer. In fact, 1099 workers usually make more than the minimum wage per hour because they pay higher taxes and have to shoulder their own expenses like healthcare insurance and office supplies.

How Can an Employment Attorney Help With Minimum Wage Cases?

Are you not being paid the minimum wage? Has your employer not caught up with January 1 or July 1 minimum wage changes? Are you owed back pay or overtime? Have you been misclassified as a 1099 employee?

An employment lawyer like Employee Law Group can help with all these situations and more in the Los Angeles area, including discrimination, harassment, and retaliation.

We can tell you if you have a legal case against your employer and suggest next steps. You may want to file a complaint with the state or pursue a lawsuit to get what’s rightfully yours. In some cases, you may be due penalties and fees on top of back wages.

It costs nothing to have an initial consultation with Employee Law Group. And there are no up-front fees at all; we only take a fee if we recover on your behalf.

To set up your complimentary appointment, call us today at 310-407-7358. Or feel free to reach out any time online to let us know how we can assist you.