Minimum Wage & Exempt Employee Wage Increase for 7-1-2022 & 1-1-2023

JULY 1, 2022: MINIMUM WAGE INCREASE AND IRS MILEAGE RATE INCREASE; JANUARY 1, 2023: WAGE INCREASE FOR EXEMPT EMPLOYEES

Effective July 1, 2022, various municipalities across California will be increasing the minimum wage under their local minimum wage ordinances.  The amount of the wage rate increase varies by city and county, and some municipalities distinguish between large and small employers.

Employers in the following California locations should review their pay rates for compliance with the new minimum wage rates, effective July 1, 2022.

• City of Alameda: From $15.00 to $15.75.
• City of Berkeley: From $16.32 to $16.99.
• City of Emeryville: From $16.97 to $17.48.
• City of Foster City: A new minimum wage ordinance passed in May 2022 will increase the minimum wage to $15.75 on July 1st. The minimum wage will increase on January 1st each year thereafter. 
• City of Fremont: From $15.00 for small businesses (25 or less employees) and $15.25 for large businesses (26 or more employees) to $16.00 for all businesses, regardless of size.
• City of Long Beach: For hotels with 100 or more rooms, the minimum wage will increase from $15.69 to $16.73. For concessionaire workers, the minimum wage will increase from $15.32 to $16.55.
• City of Los Angeles: From $15.00 to $16.04. For hotels with 150 or more guest rooms, the minimum wage will increase from $17.64 to $18.17.
• County of Los Angeles (unincorporated areas): From $15.00 to $15.96.
• City of Malibu: From $15.00 to $15.96.
• City of Milpitas: From $15.65 to $16.40.
• City of Pasadena: From $15.00 to $16.11.
• City & County of San Francisco: From $16.32 to $16.99.
• City of Santa Monica: From $15.00 to $15.96. For hotels, the minimum wage will increase from $17.64 to $18.17.
• City of West Hollywood: For small businesses (less than 50 employees), the minimum wage will increase from $15.00 to $16.00. For large businesses (50 or more employees), the minimum wage will increase from $15.50 to $16.50. For hotels, regardless of size, the minimum wage will increase from $17.64 to $18.35.

IRS Mileage Rate Increase – July 1, 2022

With inflation increasing the price of gas to record highs, the Internal Revenue Service has increased the mileage rate for remainder of 2022.

Effective July 1, 2022, for the final six months of the 2022 tax year, the standard mileage rate is 62.5 cents per mile for business travel, which is an increase of 4 cents.         

California Minimum Salary for Exempt Employees-January 1, 2023

On May 12, 2022, Governor Gavin Newsom announced that the California minimum wage for all employers in the state will be increased to $15.50 on January 1, 2023, which is a $0.50 cent increase from the original plan to increase the minimum wage to $15.00 on said date.

Therefore, employees properly classified as exempt must receive a salary of at least twice the California State Minimum Wage. Effective January 1, 2023, for all employers, regardless of the number of employees, the minimum salary will increase to $64,480.  County and City ordinances regarding the minimum wage (as set forth above) does not change the amount to be paid.

Employers must ensure they are in compliance with the above minimum wage rates.  This legal update is not intended to constitute legal advice. Please contact our office so that we can assist you.