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New Employment Laws Affecting California Employers Employee Compensation Part I

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The materials contained herein are for information purposes only and not for the purpose of providing legal advice. For advice about a particular problem or situation, please contact an attorney.

New Employment Laws Affecting California Employers

Employee Compensation

Effective January 1, 2017

 

There are nine (9) significant developments in California employment law, affecting employee compensation which require your attention:

1 – State Minimum Wage Increases To $10.50 Per Hour; New Minimum Salary Threshold For Overtime Exempt Employees Created. Effective January 1, 2017, California’s state minimum wage will increase from $10.00 to $10.50 per hour. California also added a “minimum salary threshold,” or a minimum amount of pay employees must receive as an additional requirement to quality for overtime exemptions. Effective January 1,2 017, all overtime exempt employee must earn at least $43,680 per year ($21 per hour based on a 40-hour workweek).

Both the California State Minimum Wage and the minimum salary threshold are scheduled to gradually increase until 2023 when the California minimum wage will be $15 per hour, and the state minimum salary threshold will be $62,400 ($30 per hour based on a 40-hour workweek)

 

stateminiwage

 

Further upward adjustments after 2022 to the State Minimum Wage have also been provided for by way of a complicated formula linked to the US Bureau of Labor Statistics non-seasonally adjusted Consumer Price Index. However, any such increase can be rejected by the California state legislature.

Some cities, including Berkley, Los Angeles, Oakland, San Diego, San Francisco, and San Jose have higher city-wide minimum wages.

Berkeley’s minimum wage will increase from $12.53 per hour to $13.75 per hour on October 1, 2017, and again on October 1, 2018 to $15.00 per hour. $10.50 per hour on January 1, 2017; $12 per hour on July 1, 2017; $13.50 per hour on January 1, 2018; and $15 per hour on January 1, 2019.

Los Angeles minim wage will increase based upon employer size:

stateminiwage_2

San Diego’s minimum wage will increase from $10.00 to $11.50 on January 1, 2017. Starting on January 1, 2019, the minimum wage will increase with the Consumer Price Index.

San Francisco’s minimum wage is scheduled to increase on July 1, 2017 from $13.00 per hour to $14.00 per hour, and will increase on July 1, 2017 to $14.00 per hour, and again on July 1, 2018 to $15.00 per hour. Thereafter, increases will be linked to the consumer price index.

San Jose’s minimum wage will increase on January 1, 2017 from $10.30 to $10.50 per hour. On July 1, 2017, the city’s minimum wage will increase to $12. On January 1, 2018, the rate will increase to 13.50 per hour; and $15 per hour on January 1, 2019.

Immediate Action Recommended: Review your job descriptions, employee locations, and payroll to ensure compliance with applicable local and state wage laws.

 

 

The materials contained herein are for informational purposes only and not for the purpose of providing legal advice. For advice about a particular problem or situation, please contact an attorney.

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