Updated Nov. 20: California voters rejected Proposition 32, the minimum wage measure on the November ballot, which means California’s minimum wage will rise to $16.50 on Jan. 1, 2025, for employers of every size.
Had Proposition 32 passed, it would have immediately raised the minimum wage even higher for larger employers and for all other employers in January 2025. The vote was too close to call for nearly two weeks with millions of mail-in votes still being counted, but the ballot measure’s defeat is now official.
Also, through local ordinances, many cities set their minimum wage even higher, and these increases typically take effect annually in January or July. So far, at least 25 cities have confirmed increases in local minimum wages effective Jan. 1, but others may follow.
Employers always must pay the higher minimum wage, including the local minimum wage in the employer’s place of business if it is higher than California’s minimum wage. And employers with exempt employees should evaluate their workers’ salaries because exempt employees in California generally must earn a minimum monthly salary of no less than two times the state minimum wage for full-time employment.
Dental offices generally are not included in the health care worker minimum wage that took effect in October 2024.
Current law allows for minimum wage increases due to inflation
The state minimum wage has increased every year for employers of all sizes since 2017 in accordance with legislation signed into law by former Gov. Jerry Brown. That law capped the minimum wage at $15. Employers with 26 or more employees reached the cap in January 2022; employers with fewer than 26 employees reached the $15 cap in 2023.
However, a provision in the law allows wages of at least $15 to be raised annually up to 3.5% (rounded to the nearest 10 cents) for any increase in inflation over 7% as measured by the national Consumer Price Index. This adjustment was made in 2024, increasing the minimum wage to $16, and is happening again now. All California employers of every size will begin paying a minimum wage of $16.50 beginning Jan. 1, 2025.
The increase also affects the minimum salary requirements for full-time exempt employees.
Some local minimum wages will increase Jan. 1 or in July
Dentists should familiarize themselves with their local government wage order and ordinances. In some areas of California, the minimum wage is rising more quickly than the state minimum wage. Employers in more than two dozen cities are already required to pay an hourly minimum wage ranging from $16.70 to over $19.
Member dentists are encouraged to log in to review CDA’s resource Minimum Wage and Paid Sick Leave Ordinances by City/County. The updated resource lists the following cities that have confirmed minimum wage increases effective Jan. 1, 2025:
- Cities of Belmont, Burlingame, Cupertino, Daly City, El Cerrito, Foster City, Half Moon Bay, Hayward, Los Altos, Mountain View, Novato, Palo Alto, Petaluma, Redwood City, San Carlos, San Diego, San Jose, San Mateo, Santa Clara, South San Francisco and Sunnyvale; and Los Angeles County.
CDA’s resource includes not only links to local wage ordinances but also to ordinances pertaining to parental leave, lactation and freelance worker protection, for example, and provides the minimum salary thresholds.
Employers must follow the stricter wage standard
Again, employers must follow the stricter wage standard when paying employees — specifically, the standard that is the most beneficial to the employee.
Some employees, including outside salespersons or the employer’s spouse, child or parent, are exempt from the state minimum wage law. The governor can suspend a scheduled wage increase in the event of an economic slowdown (defined as negative job growth combined with negative retail sales for a specified time period) or if a budget deficit is forecasted for the current budget year up to two additional years.
The California Minimum Wage notice for 2025 will be available later this year in the workplace postings section of the DIR’s website.
CDA members may want to bookmark CDA’s list of city and county ordinances related to minimum wage and paid sick leave — and keep an eye on their local government website — as more updates are expected by end of the year.