California Minimum Wage Workers Will Get A Rise
Governor Jerry Brown signed Senate Bill 3 on April 4, 2016. As a result, California’s minimum wage will increase on January 1, 2017, and rise each year until it reaches $15 per hour in 2022. This change affects employers directly, as they must pay the new minimum hourly rate and review which employees qualify as “exempt” from overtime. Misclassifying an employee as exempt can create substantial legal liability. Therefore, keeping up with the new law is crucial.
Currently, the minimum wage in California is $10 per hour. Under the new law, employers with 26 or more employees must pay at least $10.50 per hour starting January 1, 2017. Smaller employers follow a separate schedule, so it is important for all employers to understand when and how much the increases will be.
If you are an employer in California, understanding how the wage increase affects your business is critical. In addition, consulting with an employment law attorney can help you review your payroll structure and make necessary adjustments. Employers must consider exempt classification issues. Specifically, they need to ensure employees meet the minimum salary test and account for the FLSA standard, which currently exceeds California’s minimum for exempt employees. The law will impact multiple scenarios for how employees are paid, so legal guidance is advisable. California employers
The employment law attorneys at Van Egmond & Heitlinger, APC represent employers throughout the San Francisco Bay Area and Northern California. If you are an employer, contact us with any questions about the minimum wage changes and how they may affect your company.