US Federal vs California Minimum Wage Laws

November 15th 2024

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.