California Increases Its Minimum Wage

The new year brings new laws for California employers, and new rights and protections for California employees. Among these new laws is an increase in the state's minimum wage (Labor Code §1182.12), as amended September 2013). Be aware, however, this increase affects minimum wage and exempt employees. (Labor Code §515(a))

The first minimum wage change occurs on July 1, 2014, when the state's minimum hourly wage increases to $9.00. The minimum hourly wage will increase again, on January 1, 2016, to $10.00.

The effect of the change on hourly employees who are paid the minimum is obvious, but the effect on exempt employees is more subtle. Exempt employees are employees who meet specific criteria. This status results in their exclusion from entitlement to mandatory payment for overtime. The minimum wage affects exempt employees because they must be paid a monthly salary no less than two times the state minimum wage for full-time employment for the classification to be valid. (Labor Code §515(a)) This mean the minimum salary requirement for exempt employees will increase to $37,440 on July 1, 2014, and on January 1, 2016, the threshold will be $41,600.

Our office provides counseling and litigation services to assist with these issues as well as other issues affecting employment. If you would like discuss employment wage and hour issues further or if you have any other questions about employment, please contact us.