Seyfarth Shaw LLP | www.seyfarth.com Litigating CA Wage & Hour Class and PAGA Actions (24th Edition) 79 XI. California Minimum Wage Claims As of January 1, 2025, California’s state minimum wage is $16.50 per hour, regardless of employer size.380 The rate is adjusted annually for inflation based on the national consumer price index for urban wage earners and clerical workers. However, the minimum wage cannot be lowered, even if there is a negative CPI, and the highest raise allowed in any one year is 3.5 percent.381 Various cities within California impose higher minimum wage rates.382 In addition, beginning on April 1, 2024, the minimum wage for fast food workers was increased to $20 per hour.383 And, as of October 16, 2024, the minimum wage rate for healthcare industry workers increased to $18, $21 or $23 per hour, depending on what type of facility employs them and where they work.384 A. Wage Averaging Improper Under California Law Wage averaging is not permissible under California law, and refers to the practice of calculating an employee’s average hourly pay over a workweek to determine compliance with minimum wage laws, rather than ensuring that each individual hour worked is compensated at or above the minimum wage. In Armenta v. Osmose, Inc.,385 employees alleged that their employer violated state minimum wage laws by failing to pay for off-the-clock work. The employer defended the claim by arguing that the employees’ average hourly pay for the workweek was greater than the minimum wage, which defeats any claim for minimum wage under the federal “averaging method” for determining minimum wages.386 However, the Court of Appeal in Armenta rejected the employer’s argument and instead adopted the position set forth in a DLSE Opinion Letter that California law requires that the minimum wage be paid for each and every hour worked. Accordingly, regardless of the total compensation an employee earns during a week, or even during a single day, if there are hours the employee has worked but was paid less than the minimum wage, then the employer has violated Labor Code section 1194 by failing to pay minimum wage for those hours..387 Armenta reasoned that California intended its minimum wage law to be more protective than the FLSA, and that this greater protection required employers to pay minimum wage for “all hours worked,” which is language absent from the FLSA.388 Armenta also noted that Labor Code sections 221-223, which have no counterparts under the FLSA, make it illegal to secretly pay employees less than the amount designated by statute or contract.389 Armenta failed to 380 https://www.dir.ca.gov/dlse/minimum_wage.htm. . 381 https://www.dir.ca.gov/dlse/faq_minimumwage.htm. 382 https://laborcenter.berkeley.edu/inventory-of-us-city-and-county-minimum-wage-ordinances/#s-2. 383 https://www.dir.ca.gov/dlse/minimum_wage.htm. 384 https://www.dir.ca.gov/dlse/Health-Care-Worker-Minimum-Wage-FAQ.htm 385 Armenta v. Osmose, Inc., 135 Cal. App. 4th 314 (2006). 386 Id. at 319. 387 Id. at 324-25. 388 Id. at 323-24. 389 Id.
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