labor lawAdivision of labor law center

Effective January 1, 2008 the California state minimum wage will increase to $8.00 per hour. This 50-cent increase was part of a minimum wage compromise agreed to in 2006. However, that doesn’t mean that the new California minimum wage will be the highest in the nation.

Currently, the highest state minimum wages are Oregon at $7.80 per hour and Washington at $7.93 per hour. Both Oregon and Washington have provisions in the state statute for automatic increases in the minimum wage due to the cost of living. On January 1, 2008, the Washington minimum wage will increase by 14 cents to $8.07 per hour. On that same date, the Oregon minimum wage will increase by 15 cents to $7.95 per hour.

Since both Washington and Oregon’s minimum wages increase each year, they are likely to quickly outpace the California rate unless new legislation is passed in the Gold Rush State.

The California minimum wage is set by the state’s Industrial Welfare Commission.

In 2006, amid strong pressure by Democrats to increase the state minimum wage, Governor Arnold Schwarzenegger agreed to a two-step increase, with a 75-cent bump from $6.75 to $7.50 on January 1, 2007 and a 50-cent bump on January 1, 2008. 

The 75-cent increase in 2007 was the first hike in the California minimum wage since 2002.

As recently as February of 1998, the California minimum wage was just $5.15 per hour. That’s on a par with the federal minimum, and a low rate considering the fact that California has the highest cost of living – and some of the highest real estate prices – in the nation.

The progression of minimum wage increases in California is:

• March 1, 1998     $5.75
• January 1, 2001  $6.25
• January 1, 2002  $6.75
• January 1, 2007  $7.50
• January 1, 2008  $8.00

A number of other states also have minimum wage increases slated for January 1, 2007. On that date, the Florida minimum wage will increase by 12 cents from $6.67 per hour to $6.79 per hour. The Delaware minimum wage will increase on that same date.

The California minimum wage applies to nearly every worker in the state. There are a very few exception. Outside salespeople are exempt from the state minimum wage law.  In addition, any worker who is the parent, spouse or child of the employer can legally be paid less than the minimum wage. Apprentices under the State Division of Apprenticeship Standards may earn less than the state minimum wage.

California also permits learners to earn less than the state minimum wage, regardless of the learner’s age. To qualify, an employee must be working in an occupation where they have no previous or related experience. These workers must be paid 85% of the prevailing minimum wage, rounded up to the next 5 cents. That’s $6.40 for 2007 and $6.80 for 2008. This rate is only valid for the first 160 hours of employment.

California does not automatically exempt minors from the minimum wage law. Unless a minor meets the requirements for the learner’s rate above, he or she must be paid at least the minimum wage. The minimum wage is a right that cannot be voluntarily waived by employees under a union contract or private agreement.

In some circumstances, workers who are physically or mentally disabled (or both) may be paid less than the state minimum wage by non-profit organizations such as sheltered workshops or rehabilitation facilities. Both the individuals and the employers must be issued a special license by the Division of Labor Standards Enforcement, authorizing payment of a rate lower than the state minimum wage.

California is one of just a handful of states where tipped employees are entitled to the minimum wage, so they must be paid $8.00 per hour beginning January 1, 2008, as well.

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