July 1, 2025 Compliance Alert: Minimum Wage and Salary Threshold Updates for Employers

As July 1 approaches, employers should prepare for a new round of updates to minimum wage rates and, in some jurisdictions, salary thresholds for exempt employees. These mid-year changes may impact payroll and classification practices, especially for companies with a multi-jurisdictional workforce.

This article outlines the key changes taking effect on July 1, reviews important updates already in place for 2025, and provides practical steps employers can take to remain compliant.

For questions about wage and hour compliance or tailored legal support, please contact our Managing Partner, Richard Liu, at contact@consultils.com.

Federal Developments

• Federal Minimum Wage: No change. The federal minimum wage remains at $7.25 per hour.

• Federal Salary Threshold:

  • Proposed increase to $1,128/week (or $58,656/year) was vacated by a federal court on November 15, 2024.

  • The current federal threshold remains at $684/week ($35,568/year).

Statewide and Local Minimum Wage Increases (Effective July 1, 2025)

1. California Local and Industry-Specific Rates

While the statewide minimum wage remains $16.50/hour (since January 1, 2025), employers in the following cities must comply with updated local minimum wages:

• Berkeley: $19.18/hour

• Emeryville: $19.90/hour

• Los Angeles (City): $17.87/hour

• Unincorporated Los Angeles County: $17.81/hour

• San Francisco: $19.18/hour

• Santa Monica: $17.81/hour

• West Hollywood (Hotel Workers): $20.22/hour

In addition, under SB 525, California healthcare facilities that meet the “large employer” definition must begin paying covered healthcare workers $24.00/hour starting July 1, 2025. A “large employer” under SB 525 refers to:

• A healthcare facility with 10,000 or more full-time equivalent employees (FTEs) in California; or

• A facility that is part of an integrated healthcare delivery system with 10,000 or more FTEs in the state. This includes major hospital systems such as Kaiser Permanente and others operating on a statewide scale.

2. Other Statewide Increases

• District of Columbia: $17.95/hour

• Nevada: $12.00/hour

• Oregon:

  • Portland Metro: $16.30/hour

  • Standard counties: $15.05/hour

  • Nonurban counties: $14.05/hour

For information on other states that implemented minimum wage increases effective January 1, 2025, please refer to our earlier article: Staying Compliant in 2025: Key Wage and Salary Threshold Updates.

State Overtime Exemption Salary Thresholds

Although the federal increase has been blocked, many states continue to require higher minimum salary thresholds for exempt executive, administrative, and professional employees.

Employers must ensure employees classified as exempt meet both the salary basis test and job duties test under applicable state and federal law. Where state thresholds are higher than the federal standard, the state rule applies.

What Employers Should Do Now

To prepare for the July 1 changes and ensure ongoing compliance, employers should:

• Communicate changes internally so HR, payroll, and management teams are aligned on compliance updates.

• Update payroll systems and schedules to reflect any new wage or salary rates effective July 1.

• Confirm exempt employee classifications, verifying that salaries meet the latest applicable thresholds and that job duties align with exemption criteria.

• Monitor regulatory developments, particularly around overtime rules and salary thresholds at both the state and federal levels.

  
  

For questions about wage and hour compliance or tailored legal support, please contact our Managing Partner, Richard Liu, at contact@consultils.com.

Disclaimer: The materials provided on this website are for general informational purposes only and do not, and are not intended to, constitute legal advice. You should not act or refrain from acting based on any information provided here. Please consult with your own legal counsel regarding your specific situation and legal questions.

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Richard Liu, Esq. is the Managing Counsel of ILS. He serves clients as a management-side defense lawyer specializing in employment and business litigation. Richard is also an expert on litigation prevention and compliance. He regularly advises Fortune 500 companies and startups on employment, labor, and commercial matters.

Email: contact@consultils.com | Phone: 626-344-8949