As the new year dawns upon us, California is poised for a crucial change that directly impacts workers statewide. Effective January 1, 2024, the minimum wage in California is slated to rise from $15.50 per hour to $16.00, marking an essential adjustment necessitated by the consistent increase in the Consumer Price Index (CPI). This change reflects the commitment to maintaining fair living standards for workers in the face of inflation.
This adjustment doesn't only affect the hourly minimum wage. For those under the Salary Exemption category, the new minimum salary increases from $64,480 annually to $66,560. The Salary Exemption test, which requires 2X the minimum wage, reflects this change as well.
The journey toward this impending shift in California's minimum wage laws has been a gradual one, characterized by a series of adjustments designed to reach the $15.00 per hour mark. Commencing on July 1, 2023, this step-by-step approach allowed for annual reviews of the CPI to determine if further adjustments were warranted to align with inflation rates. Underpinning these revisions is the careful consideration of the U.S. Consumer Price Index for Urban Wage Earners and Clerical Workers (U.S. CPI-W), which indicated a significant 6.16 percent increase from July 1, 2022, to June 30, 2023, compared to the previous 12-month period.
Ensuring compliance with these changes and navigating intricate payroll and HR matters can feel daunting. You may be asking how you can ensure you are keeping up with these new requirements. This is where HR Simplistic can help. HR Simplistic is the Coachella Valley’s local payroll and HR provider. It is our job to know these changes inside and out. We can step in to assist your small business in comprehending and adhering to the impending adjustments, offering guidance and support to ensure businesses seamlessly transition and comply with this and other new regulations beginning Jan.1, 2024.
The new law mandates that the minimum wage increases annually by the lesser of 3.5 percent or the rate of change in the averages of the two most recent U.S. CPI-W, unless these averages result in a negative value. In case of negative averages, the minimum wage remains unchanged for the subsequent year. Governor Newsom certified the minimum wage increase for all employers for 2024 on July 31, 2023, following these guidelines.
It's crucial to note that alongside the general minimum wage increase, specific adjustments have been made for Fast Food and Health Care employees, further emphasizing the importance of staying informed about these changes to comply with the law.
As California gears up for the minimum wage increase to $16.00 per hour on January 1, 2024, HR Simplistic stands ready to assist small businesses in adapting to these changes. Their expertise in Payroll and HR matters makes them an invaluable ally for businesses seeking guidance to navigate the evolving labor laws. With HR Simplistic, small businesses can confidently embrace the new year, ensuring compliance and fair compensation for their workforce amidst these important changes in California's labor landscape. Email or call to schedule a call with Paul Hodapp and his HR Team today.