Growing up as a teenager in Southern California in the early 1980s was a wonderful time. The world seemed so much more simple back then. Like every other junior in high school, I couldn’t wait to get my driver’s license and hit the road, but that required buying a car. That meant working odd jobs like washing cars in my driveway until I could secure a “real” job in the fast food industry making burritos and tacos. The minimum wage back then was a whopping $3.10 an hour. As a high school student, I didn’t need this job to survive; I just wanted to save for a car, put gas in it, and have fun, and a minimum-wage job provided that opportunity. It took a while, but I eventually saved enough to purchase my first car, a 1973 AMC Gremlin, for only $700. Yes, the exterior was green, and the prior owner “upgraded” the interior with custom lime-green seats. I have so many great memories of adventures in that car – it was well worth the hard work and saving to get it. A lot has changed since then – for one thing, cars cost more than $700, and California’s minimum wage has increased considerably.
California Minimum Wage
If it seems like businesses and non-profits, including churches in California, are constantly increasing the minimum wage, it’s because they are. Since 2016, California increased the minimum wage every year. At the time of this article (September 2024), the minimum wage went from $10.00 an hour in 2016 to $16.00 an hour – that’s a 60% increase in just eight years. On January 1, 2025, California’s minimum wage will increase again to $16.50 per hour.
It’s More Than Hourly Employees
The minimum wage hike doesn’t only impact hourly workers; California sets the minimum salary for full-time, exempt employees based on the minimum wage. The formula used to calculate the minimum salary for a full-time, exempt employee is simple: double the minimum wage, multiply that by a 40-hour workweek, and then multiply that by 52 weeks.
What it looked like in 2016:
((10*2)*40)*52 = $41,600 minimum annual salary
How it looks in 2025:
((16.50*2)*40)*52 = $68,640 minimum annual salary
But It May Go Even Higher
This November, Californians get to vote on Proposition 32, which aims to increase the minimum wage even further to $18.00 an hour by 2026. If passed, California will implement a stairstep model, raising all employees’ wages until employers meet the new $18.00 minimum. The annual minimum salary for a full-time exempt employee will climb to $74,880. On top of the proposed wage changes under Proposition 32, California can also increase the minimum wage even higher due to the CPI (consumer price index) adjustments for inflation.
The Impact On Churches
During difficult financial times, churches may consider compensation a potential place for budget reductions, especially since compensation can take up to 45%-55% of the entire operational budget. Before heading too far down that road, bear in mind that only licensed or ordained ministers meeting specific requirements are exempt from federal, state, and local wage restrictions. Non-ministerial employees, like facilities staff, office employees, child-care workers, etc., are not exempt from the minimum wage. As followers of Jesus, churches should set the standard on how to treat employees, not find ways around it, and that includes paying at least the minimum wage. For some churches, that may mean employing fewer employees and relying more on volunteers. Whatever it may mean to your church’s budget, it should never mean underpaying employees. Scripture is clear, “You shall not muzzle the ox while it is threshing,” and “The laborer is worthy of his wages.” 1 Timothy 15:15.
The world has changed a lot since I made $3.10 an hour to save for a $700 car. For employers in California, the pace of changes, especially when it comes to paying workers a minimum wage, has increased dramatically since 2016. For churches, these wage changes may mean reducing the number of staff members but should never include paying wages below the minimum.
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