On July 1, 2024, a number of local governments throughout California will raise their minimum wage. In the City of Los Angeles, the minimum wage will rise from $16.78/hour to $17.28/hour ($20.32/hour for hotel employees at hotels with 60 or more guest rooms).

The new rate for employees in Malibu, Santa Monica, and unincorporated areas of Los Angeles County is $17.27/hour ($20.32/hour for hotel employees in Santa Monica).

Below is a summary of the local minimum wage rates which are increasing on July 1, 2024:

As a reminder, employers in these cities should update their minimum wage postings in the workplace to reflect local increases.

Employers whose employees work in California localities that have not set their own minimum wage must continue to apply the State of California’s minimum wage requirement, which is currently $16/hour for most employers of all sizes. Pursuant to recently enacted laws, fast food restaurant employers must deal with a higher minimum wage of $20/hr. However, implementation of a new law increasing the minimum wage for California healthcare workers has been delayed until at least October 15, 2024. For employees working in cities which require a higher minimum wage than the state minimum wage, including all of the cities listed above, employers should pay the higher city minimum wage.

Employers should also remember that an increase in the municipal/local minimum wage does not affect the minimum wage that is to be used for the salary-basis test for California’s professional, administrative and executive exemption classifications. As a reminder, to satisfy the administrative, executive, and professional exemptions from overtime, California employers must pay exempt employees a salary that is at least twice the state minimum wage (equal to $1,280 week/$66,560 annually) in addition to meeting the other requirements for those exempt classifications.

Our clients with employees in other states should be aware that the salary threshold for the federal executive, administrative and professional overtime exemptions will increase from $35,568 to the equivalent of an annual salary of $43,888 ($844 weekly) on July 1, 2024. The threshold will further increase to $58,656 ($1,128 weekly) on January 1, 2025. (As of the date of publication of this alert, the first increase under the new federal overtime rule remains set to go into effect as scheduled despite a number of business groups filing a legal challenge to the new rule in Texas federal court.) for exempt employees (such as California), employers should follow the higher threshold.