California’s Minimum Wage Set to Increase on Jan. 1

SACRAMENTO -- California's minimum wage is set to increase by 50 cents on Monday, Jan. 1.

"A bunch of stuff is getting expensive, like rent is getting really pricey," Erica Garbuzova said. "It's really hard to find rent in Sacramento."

Garbuzova recently worked for minimum wage at an ice cream shop, before starting work at Vela Cafe that pays her a dollar more.

"Even if it's an extra dollar it still makes a difference," she said.

Starting with the new year, businesses with more than 26 employees will have a minimum wage of $11 an hour. Businesses with fewer than 26 employees will have a minimum wage of $10.50.

Vela Cafe owner Feras Jowaniyah says he decided before the increase to pay his staff more than minimum wage.

"We understand the cost of living, so we want to be fair with them and we always look for highest quality employees. Everything will be fair for everyone," he said. "As long as business is going well we are willing to pay it."

That concern is shared with a lot of small business owners -- how will an increase in wages affect the business? By 2023, California's minimum wage will be $15.

Jowaniyah said he was a little taken aback by the news.

"But it's expected," he said.

Jowaniyah believes higher wages are ultimately good for business because workers will be motivated.

"Nobody sticks with you around here unless you are fair with them," Jowaniyah said.

According to PayWizard.org, which tracks salary issues, 19 cities in California will have a higher minimum wage than what the state requires. Sacramento is not on the list.

But come July, the minimum wage in Sacramento will go up another 50 cents. Employees like Garbuzova think it's a step in the right direction.

"Tax takes a whole bunch of money off and just one extra dollar, it makes a difference," she told FOX40.