Minimum Wage - Businesses Need to Know | Pacific Payroll Group

Minimum Wage – What Your Business Needs to Know

Updated November 2020

Minimum wage is going up in many states! Here is what you need to know:

California Employers

California minimum wage

Effective January 1, 2021 for employers in California with 25 or less employees, the minimum wage will now be $13 per hour. Those with 26 or more employees will have a minimum wage of $14.00 per hour. Looking ahead, California employers can anticipate the following rate increases:

DateLarge Employers
(26+ Employees)
Small Employers
(25 or fewer Employees)
January 1, 2020$13$12
January 1, 2021$14$13
January 1, 2022$15$14
January 1, 2023Adjustment for inflation$15

An employer with 26 or more employees at any time during a pay period should apply the higher minimum wage to all employees for that pay period. If an employer’s workforce falls below 26 employees the employer does not need to automatically lower their minimum wage rate. However, if the minimum wage is reduced because the threshold falls below 26 employees, the employer must notify the affected employees in advance before reducing their wages.

Important to note, there are Minimum Salary Exemptions for California such as computer software professionals. To learn about any of these exemptions in California or any state, please message us.

Local Mininum Wage

Local jurisdictions – Counties or Cities – may have their own minimum wage that may trump the State minimum wage. Employers must pay the rate that benefits the employee. Please check the table below (effective July 1, 2020) for more information.

CityLarge Employers
(26+ Employees)
Small Employers
(25 or fewer Employees)
Los Angeles$15$14.25
($15 for Very Large Employers
with 100+ Employees)
San Francisco$16.07$16.07
San Leandro$15$15
Santa Monica$15$14.25

Hawaii Employers

Hawaii minimum wage

Currently the minimum wage in Hawaii is $10.10 per hour.

Arizona Employers

Arizona minimum wage

Currently the minimum wage in Arizona is $12.00 per hour.

On January 1, 2021, the Arizona minimum wage will increase each year by the cost of living.

Special Note

We are currently servicing small businesses in most states and constantly expanding. Please reach out to us if you don’t see your state listed.

Always double-check the minimum wage in your area, as governed by the Fair Labor Standards Act (FLSA), to verify this article has the most current information.

Things can change rapidly during an economic downturn or a pandemic. We are here to help you through these changes.

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