What Is The Minimum Wage in California?

California is one of the states in the U.S. with the highest minimum wage. As of January 1, 2018, the minimum wage in California is $12.00 per hour for businesses with 25 or fewer employees and $13.00 per hour for businesses with 26 or more employees. The minimum wage increases over time based on the California Consumer Price Index and applies to all employers in the state, regardless of size.

Impact on Employees

The minimum wage increase in California provide a new floor of pay for low-wage workers and their families. The California Budget and Policy Center estimated that, through the increase in the state minimum wage, nearly 4 million workers will get a raise in 2018. For workers that earn the minimum wage, this could mean a potential boost in annual income of up to $1,500. Additionally, minimum wage increases are a part of California’s plan of decreasing income inequality and maintaining the health of the state’s economy.

Impact on Businesses

The increase in the minimum wage presents challenges for businesses. Businesses must adjust their payrolls, budgets and staffing accordingly in order to accommodate the wage hike. It is estimated that this wage hike will cost California businesses an additional $4.6 billion in 2018. These increased costs force businesses to make budgeting adjustments in order to remain economically viable, as well as abide by minimum wage regulation.

Conclusion

The minimum wage hike in California can have a positive and a negative effect on businesses and employees. While employees benefit from the wage increase, businesses have to adjust their finances accordingly. Regardless, the wage increase is necessary in order to meet the cost of living in California and ensure that families are able to make ends meet.