California Employees: Major Increases to Look Out for in 2025

As a California employee, there are several critical financial updates you need to be aware of as you get into 2025. These updates range from increased minimum wages to increased salary requirements for certain employees. Regardless of the industry you work in, you must be informed, as these changes affect various sectors in California. It is vital that you understand the significant increases happening in 2025 since they might have a direct impact on your wages, benefits, and workplace policies. This article discusses five significant increases California employees should look out for in 2025.

1. Minimum Wage Increases

One of the major increases to look out for in 2025 is the increase in California’s minimum wage. In 2025, California employers must pay non-exempt employees at least $16.50 per hour, up from $16. While California voters rejected a proposal to raise the state’s minimum wage to $18/hour (Proposition 32), employers must still comply with local ordinances. Employers must comply with the local law if a city or county has a higher minimum wage than the state’s. For example, Los Angeles, San Francisco, San Mateo, and San Jose often have their own minimum wage laws, which usually set higher rates.

As an employee, you need to be vigilant. Ensure your pay aligns with the state or local regulations.

2. Higher Salary Requirements for Exempt Employees 

In California, an employee must meet a duties and salary basis test to be considered exempt from wage and hour laws, such as overtime pay or meal and rest breaks. To pass the duties test, the employee should generally have primary executive, administrative, or professional duties, and they must customarily exercise discretion and independent judgment at work. As for the salary basis test, the employee must receive at least twice the minimum wage for full-time work (40 hours per week). For 2025, the state’s minimum wage is $16.50/hour. This means that in 2025, for an employee to qualify as exempt, they must receive at least $68,640 per year.

If your employer has classified you as an exempt employee, ensure they adjust your salary to meet the new requirement.

3. Computer Professionals Pay Adjustments

Some individuals in the tech industry, particularly those in computer software roles, are exempt from overtime requirements if they are paid a specific salary. In 2025, covered computer professionals must receive at least $56.97/hour, $9.888.13/month, or $118,657.56 annually. If you are in the tech industry, ensure you are paid the set amount.

4. Fast Food Worker Minimum Wage Updates

In April 2024, a new law (AB 1228) caused wages for workers in the fast food industry to increase to $20 per hour. Based on factors such as inflation and economic conditions, this rate may increase further starting from January 2025. If you are in the fast food industry, keep an eye on announcements about wage adjustments for 2025.

Important Steps to Take as an Employee

As an employee, it is vital to;

• Review your pay stubs to ensure compliance with new increases
• Speak up if you believe your employer is violating the law
• Stay informed about further changes

Contact a California Employment Lawyer

Contact a California employment lawyer if you have questions or concerns or need help with an employment law-related matter.