As we’ve blogged about before, many cities in California have increased their minimum wage effective July 1st. July 1st has come and gone, and just when you think that it is impossible to have another local minimum wage ordinance to keep in mind (given how many there are already), San Diego announced its new minimum wage last Monday. Here is a handy chart to help you keep track of all these increases (well, until the next minimum wage increase that is).
|City||Minimum Wage Rate|
|Emeryville||$13/hour (55 or fewer employees); $14.82/hour (56 or more employees)|
|Los Angeles||$10.50/hour (26 or more employees); Requirement for smaller employers delayed until 2017|
|Los Angeles County||$10.50/hour (26 or more employees); Requirement for smaller employers delayed until 2017|
|Pasadena||$10.50/hour (26 or more employees); Requirement for smaller employers delayed until 2017|
|Santa Monica||$10.50/hour (26 or more employees); Requirement for smaller employers delayed until 2017|
When we talk about minimum wage, we usually think of non-managerial hourly workers. We sometimes forget that there are minimum wage requirements for exempt employees in the “white collar” exemptions (executive, administrative, and professional employees) as well. Those requirements are known as minimum salary thresholds under state and federal standards. The current minimum salary threshold in California is $41,600, twice the state’s current minimum wage of $10 per hour. But effective December 1, 2016, the new minimum salary threshold will be $47,476 under the new Federal Overtime Rule. In order to be exempt under the “white collar” exemptions, those employees must be paid at least $47,476 by December 1, 2016.
When determining exempt status, employers look at requirements such as whether the employee manages the business, exercises discretion and independent judgment, or whether (s)he has a special state license, and stop there. However, employers often forget to make sure that those employees are paid the minimum salary threshold. Failing this requirement means that the employee is NOT exempt from overtime provisions, even if (s)he would otherwise be exempt. In that case, employers will be liable for unpaid overtime, meal and rest breaks, failure to furnish itemized wage statements (Labor Code Sec. 226), and other Labor Code violations.
With the upcoming new minimum salary threshold, now is the time to review your pay policies for both exempt and non-exempt employees. Make sure non-exempt employees are paid minimum wage as set forth above, and that exempt employees are paid a salary of at least $47,476 to best guard against costly litigation.