Why cities in California have varying minimum wages

California local entities (cities and counties) are allowed to authorize minimum wage rates. Thus, while the state minimum wage is $15.50/hour for both employers with 25 employees or less and those with 26 employees or more, some cities have enacted higher rates. For instance, the minimum wage of Los Angeles is $16.78 per hour, whereas that of Berkeley is $18.07.

This guide discusses why cities have different minimum wages:

Cost of living

The cost of living differs in California cities, considering the price of necessities, including housing, transportation, food and groceries, utilities, healthcare, childcare, taxes and so on. Cities use the annual cost of living increase to determine the minimum wage rate, which employers will post at each workplace and on job sites in a conspicuous place.

As of July 2023, West Hollywood has the highest minimum wage at $19.08.

Note that some cities have different minimum wages depending on the company’s size. For example, the minimum wage in Hayward is $16.34, but small employers have the same rate as the state ($15.50).

In Novato, the minimum wage for large employers is $16.07 and $15.53 for small employers. Very large businesses (100+ employees) have a minimum wage rate of $16.32. Further, Sonoma has minimum wage rates of $17.00 and $16.00 for large and small employers, respectively.

Can an employer pay you below the local rate but above the state’s?

With different minimum wages in California, it can be challenging for an employee to notice when wage and hour violations occur. If your employer pays you $15.50/hour or more but less than your local’s minimum wage, you may be experiencing wage theft.

If your employer fails to pay you the minimum wage according to state and local laws, it may be time to get legal help to protect your rights.