Increase in State minimum wage to $16.50/hour
This is a reminder that, as we previously advised, California’s state minimum wage will increase to $16.50 per hour for all employers effective January 1, 2025.
This increase affects non-exempt employees, who must be paid the increased rate for all hours worked in 2025. (Remember that certain cities and counties have their own local minimum wages that exceed the state minimum wage, and employees covered by those rules must be paid the higher of the two.)
This increase also affects the minimum salary to be paid to salaried exempt employees. To properly classify an employee as a salaried exempt employee under the executive, administrative or professional exemptions, an employer must, among other matters, ensure that the employee is paid a salary of at least twice the state minimum wage for full-time employment. Thus, starting January 1, 2025, the minimum salary that must be paid to such employees is as follows:
| Frequency | Every week | Every two weeks | Twice a month | Annual |
|---|---|---|---|---|
| Amount | $1,320 | $2,640 | $2,860 | $68,640 |
Increase in IRS mileage rate to $0.70/mile
Effective January 1, 2025, the IRS mileage reimbursement rate will increase to $0.70 per mile. All employees who are required to drive their personal vehicle for business purposes should be reimbursed at least that amount for each business mile driven.
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