The California minimum wage is increasing to $15.50 an hour for all employers beginning January 1st, 2023. This new rate reflects an adjustment to the large employer minimum wage, which is currently $15 an hour. Joe Stephenshaw, California’s Director of Finance, determined the increase based on inflation. For small business owners, it’s essential to know that your employee’s minimum wage will also be increased to $15.50 an hour instead of its current rate of $14.00 an hour.
Since there has been an 8.3 percent increase in inflation over the past year, multiple states have implemented higher minimum wages. The cost of food, shelter, and medical services has increased significantly over the past few months. The price of basic staples, including eggs and bread, has spiked, straining household budgets. Raising minimum wage rates would improve the overall standard of living with a more feasible income level to survive these unprecedented times.
The California Labor Code
The California Labor Code is a collection of civil law statutes for the State of California. It’s made up of statutes that govern the general obligations and rights of individuals within the jurisdiction of the State of California. Workers are entitled to various rights and protections under California labor law. As inflation has impacted many individuals, the California Labor Code established the schedule for minimum wage increases. This includes an annual adjustment based on inflation taking effect with the 2023 large employer minimum wage.
Every year, there will be adjustments to the state minimum wage based on inflation, with the announcements made on August 1st. In addition, the California Labor Code requires all small employer minimum wage rates in 2023 to match the large employer minimum wage rate if inflation has exceeded 7%.
What Small Business Owners Need To Know
As a small business owner during these challenging times, you must ensure you stay on top of the ever-changing rules and regulations. In addition, your employees are your biggest asset. When you partner with GMS, we ensure you are paying your employees the correct amount each year. As inflation and the COVID-19 pandemic have affected many individuals and companies, numerous businesses have looked to increase their minimum wage prior. Our team ensures you offer the best possible wage to your employees, allowing you to attract and retain your top talent. Contact us today to learn more.