Effective January 1, 2008, the minimum wage in California is $8.00 per hour. As of July 24, 2009, the federal minimum wage is $7.25 per hour. Always comply with the higher minimum wage, which is California’s in this case. Local “living wage” ordinances vary, therefore, you may have to pay more than the minimum wage in certain cities and counties. A “living wage” is defined as “a wage sufficient to provide the necessities and comforts essential to an acceptable standard of living.” On the federal level, the Fair Labor Standards Act (FLSA) necessitates minimum wage payment to employees who work in any workweek.
On the state level, the California Wage Orders insist that every employee must receive at least the minimum wage per hour for all hours worked. According to a California appeals court, it is unlawful to average the hourly rate of the California and federal minimum wages. Some employees can be paid less than the minimum wage in rare cases, but as a general rule, the California Labor Code mandates that employees are paid minimum wages.
Based on the IWC Wage Orders, it is legal to pay “learners” 85 percent of the minimum wage. “Learners” are employees who do not have previous similar or related experience in their current occupation. After 160 work hours, state law requires the “learners” to be paid at least minimum wage. If an employee is under 20 years old, the federal law allows payment of subminimum wage, or “opportunity wage”, for their first 90 consecutive calendar days of employment. It is unlawful to replace employees or reduce employees’ wages, hours, or benefits in order to hire a youth who could be paid below the minimum wage. In San Francisco, the minimum wage is higher than the state minimum wage. The hourly minimum wage is $9.92 per hour, which was effective January 1, 2011.
The city minimum wage became indexed and will increase from year to year based on increases in the Consumer Price Index (CPI). Employers who violate the minimum wage ordinance are subject to penalties. It is important to note that the San Francisco minimum wage only applies to nonexempt workers, which are employees who are paid on an hourly basis. It is state-mandated that an exempt employee is paid at least two times the state minimum wage. The current minimum monthly and annual salary requirements for exempt employees are $2,773.33 and $33,280.