California’s minimum wage to increase in 2025: What is the new amount?
California will raise its minimum wage in 2025, following an increase implemented this year. Here’s how much the hike will be and when it takes effect.
After California raised its minimum wage in 2024, the state is gearing up for another increase in 2025.
California is one of 30 states in the country that have annual wage hikes. The last increase took effect on Jan. 1, 2024, when the minimum wage rose to $16 per hour. As for the 2025 increase, California workers will have two options.
The first option is for the minimum wage to rise according to current legislation, which could represent an increase of 3.5%. The second would give workers a $2 increase.
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How much will the minimum wage in California rise in 2025? Two possible options
Current law provides that the minimum wage in California may increase each year by 3.5% or by the rate of change in the Consumer Price Index for Urban Wage Earners and Clerical Workers or CPI-W averages from the prior year to the current year, whichever is less, unless those averages are negative.
This year, the CPI-W comparative data showed changes of 3.18%, so the minimum wage in the state will increase to $16.50 on Jan. 1, 2025.
It is important to remember that the minimum wage is different for specific industries. Also, there are some cities and counties that set their own amounts.
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The initiative to increase the minimum wage in California to $18
In the November election, California voters will decide on Proposition 32, a ballot measure to gradually raise the state’s minimum wage until it reaches $18 an hour in 2026.
If a majority of residents vote in favor, the measure passes. For employers with 26 or more workers, the minimum wage would reach $18 on January 1, 2025. For employers with 25 or fewer workers, the minimum wage would reach $18 on January 1, 2026.
As for the succeeding years, the proposal states that starting in 2027, the increase in the calculation of the minimum wage would be based on changes in the CPI-W.