Employers: Ready for California’s Minimum Wage Increase?
Last September, Governor Jerry Brown signed Assembly Bill 10 into law, beginning a series of increases in minimum wages for California workers. The first increases under AB 10 is about to go into effect.
On July 1, 2104, the minimum wage in California will increase from $8.00 to $9.00 per hour. This wage hike will have a wide-ranging impact on all California employers.
- Non-exempt employees paid less than $9.00 per hour must receive an increase in pay.
- Certain exempt employees (executive, administrative, professional) must receive a monthly salary of at least twice minimum wage on a salaried basis (as well as meet other exemption requirements). Effective July 1, 2014, the minimum monthly salary for exempt employees increases to $3,120. Employees paid less will no longer meet the exemption.
- Inside sales employees under Wage Orders 4 and 7 must earn more than 1½ times minimum wage for all hours worked (they must also receive more than 50 percent of their compensation from commissions). As of July 1, 2014, to qualify as exempt, such employees must be paid at least $13.50 per hour.
The revised California Minimum Wage Official Notice should be posted next to your IWC Wage Order and other required workplace postings.
Since 2012, California employers have been required to provide written notice to non-exempt employees containing certain information, including rate of pay. The DLSE form Notice to Employee can be used for this purpose.
Employers who have already issued this wage notice do not have to reissue as a result of the minimum wage increase provided the new wage rate is shown on the employee’s pay stub (itemized wage statement) with the next payment of wages.
Now is a good time for employers to audit their pay practices to ensure compliance with wage and hour laws. If you have questions or need assistance with an audit, please contact me.
Other Minimum Wage Hikes
If you’re doing business in the Bay Area, be aware that the Richmond City Council voted to increase wages for workers in that city to $13.00 per hour by 2018 for most employers – higher than the current minimum wage in San Francisco ($10.74/hr). Minimum wage in San Jose is currently $10.15 per hour.
This one isn’t mandated by law yet, but employers should take note the California Senate recently approved a different set of increases, set to go before the Assembly. These proposed increases, if approved, would raise minimum wage to $11.00 per hour in January 2015, $12.00 in 2016, and $13.00 in 2017.
Already in place, Assembly Bill 10 will increase wages again to $10.00 per hour on January 1, 2016.