Employers should prepare now for the upcoming change in California Labor Law that will increase the minimum wage effective January 1, 2016. Before we know it, New Year’s will be upon us; plan now for California’s new minimum wage of $10.00 per hour and be in compliance on January 1, 2016.
An increase in the minimum wage prompts the updating and review of many areas of your business. Ensure the current Minimum Wage Order (MW-2014) poster is displayed next to the DIR Wage Order notice applicable to your firm. Factor the increase into your 2016 budgets and ensure that your payroll department makes all necessary updates prior to January 1st and reflects them in employees’ paystubs.
If you have employees classified as “exempt”, remember that a raise in minimum wage will also raise the minimum salary requirement of some exempt positions. The salary basis test requires “white collar” exempt employees (executive, professional or administrative) to earn no less than twice the state minimum wage for full-time employment. Starting in 2016, such exempt employees must earn at least $41,600 per year. Carefully re-examine each position within your firm to be certain it should be classified as exempt or non-exempt, then follow all applicable wage and hour laws.
An increase in the minimum wage must also be considered as it relates to employees paid on a piece-rate basis; some commissioned inside sales employees; meal and lodging credits provided to employees; commissioned employees’ draws, and other issues with ties to the minimum wage. Employers must also stay abreast of changes in local laws regarding minimum wage. San Diego residents will vote in June, 2016 whether to keep or reject the city council’s minimum wage increase ordinance which would, among other things, raise minimum wage in the city of San Diego to $10.50 per hour as of January 1, 2016 and $11.50 per hour as of January 1, 2017.
Contact Freeland Law APC for a consultation with Michael Freeland, experienced employment lawyer serving San Diego, California.
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