US Federal vs California Minimum Wage Laws

A minimum wage is the lowest amount an employer can legally pay an employee.

Where federal labor laws in the US establish the basic standards of minimum wage and
overtime pay, state laws can provide more rights and protections to workers.

State laws can also give more responsibility to employers for employee well-being, which
can make them subject to higher penalties for violation of the law. 

The following article discusses the differences between minimum age provisions in US federal labor laws and California labor laws. If an employee
is subject to both state and federal law, the policy with the higher standard applies.

Federal Law California Law

Minimum Wage for Regular Employees 
  • For all regular
    employees     (under FLSA): $7.25 per
    hour
  • Regular
    employees:     $16.00 per hour
  • Fast food
    workers:     $20.00 per hour (as of April 1,
    2024)
  • Healthcare
    employees:     Between $18.00 – $23.00 per
    hour 

Minimum Wage for Tipped Employees
  • Tipped employees are entitled to a minimum
    cash wage of $2.13, with a tip credit of $5.12 per hour.
  • Employers must ensure that the sum of a tipped
    employee’s cash wages and tip credit equal the federal minimum wage rate i.e.
    $7.25. 
  • If
    this is not the case, the employer must make up the difference. 
  • Tipped employees in California are entitled to
    a minimum wage of $16.00 per hour. 
  • Tip
    credit is not allowed. 

Minimum Wage for Disabled Workers
  • Subminimum wages are allowed for disabled
    workers.
  • This wage must be proportionately less than
    the wage rate of regular employees in the same establishment. 
  • Employment certificates issued by the
    Secretary of Labor are required to hire disabled workers. 
  • Disabled workers in California can earn a
    subminimum wage between $3.00 to $14.00 under ‘sheltered disability programs’. 
  • However, from 2025, subminimum wage will be
    banned and disabled employees will be eligible to earn the state’s minimum wage.

Minimum Overtime Wage for Non-Exempt Employees
  • Any
    hours worked above 40 in a standard workweek are considered overtime.
  • Employers are required to compensate employees
    working overtime at 1.5 times their hourly wage rate. 
    • Employees are eligible to earn overtime pay
      1.5 times their hourly wage if work hours exceed 8 but stay less than 12 on regular
      workdays or, if work hours exceed 8 on a seventh consecutive workday.
    • Employees can earn double-time (i.e. 2x their
      hourly rate) if work hours exceed 12 on a regular workday or if work hours exceed 8 on a
      seventh consecutive workday. 

    Payment Schedules for Employees
    • No
      fixed payment schedule. 
    • It
      is at the employer’s discretion to set a suitable and predictable wage schedule for
      their employees. 
    • Payment schedules can be weekly, bi-weekly,
      monthly, or at any frequency of an employer’s choice, as long as they follow federal
      law. 
    • Employers are required to pay employees twice
      a month on predetermined paydays. 
    • Wages earned
      between the 1st and 15th day of a month:       Must be
      paid by the 26th day of the same month. 
    • Wages earned
      between the 16th and last day of the month      : Must
      be paid by the 10th day of the next month. 

      Policies Related to Final Paychecks
        • Final wages, including accrued vacation pay, are required immediately
          upon the employee’s termination. 
        • Employees without a written contract who quit
          with a 72-hour notice must be paid all wages immediately.
        • Those who quit without a 72-hour notice must
          be paid within 72 hours.

        Important Cautionary Note

        This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the
        information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently
        verify any critical information and should not solely rely on the content provided.