On January 1, 2016, the statewide California minimum wage increased to $10. This means that the minimum salary requirement increased to $41,600. For some cities in California, the minimum wage increase will become effective later in the year. The minimum wage increase also impacted other states across the nation.
The federal government has proposed an increase to the federal minimum salary requirement, which is expected to pass later this year. This would increase the minimum salary to $50,440.
Next Steps for Employers
Employers must be alert to these changes in order to limit the risk if a wage or hour claim brought by an employee. Impacted employers need to:
- Consider local governing minimum wage requirements. Minimum wage must be paid at the highest rate mandated for the employer’s locale.
- Increase wages for employees making less than the minimum required amount.
- Consider payroll-processing implications when determining the effective date of the wage change. For example, if wages are increased effective January 1, employees might have different base pays in a single pay period.
- Review and amend, if applicable, pay scales for exempt staff considering all Federal, State, and local wage requirements. For example, specific California Wage Orders require that an exempt employee’s monthly salary must be at least two times the State minimum wage for full time employment.
The Office of Labor and Standards Enforcement requires employers to post a Notice informing employees of this new increase. The Notice must be displayed where employees can easily read it.
Impacted Cities in California
San Francisco: Minimum wage will increase to $13 effective July 1, 2016. It will increase to $14 effective July 1, 2017 and to $15 effective July 1, 2018.
Berkeley: Minimum wage will increase to $12.53 effective October 1, 2016.
Emeryville: For employers with 55 employees or less: the minimum wage will increase to $12.25 effective July 1, 2016. For employers with 56 or more employees: the minimum wage will increase to $14.44 effective July 1, 2016.
Richmond: Minimum wage will increase to $11.52 effective January 1, 2016.
Los Angeles (City and County): Minimum wage will increase to $10.50 effective July 1, 2016.
San Diego: Minimum wage will increase to $10.50 effective January 1, 2016.
To see how California compares on minimum wage to other states across the country, visit: http://www.paywizard.org/main/salary/minimum-wage
If you have any questions about your obligations or compliance as an employer, please contact us at firstname.lastname@example.org or reach out to your Mitzel Group, LLP attorney directly.