Effective January 1, 2016, the California minimum wage will increase to $10.00 per hour. This increase requires that any employees with an hourly wage of less than $10.00 have their hourly wage increased as of January 1, 2016 for all time worked. California has become the first state in the nation to commit to raising the minimum wage to $10 per hour, with the increase to take place gradually through the start of 2016
For any employee who receives an increased hourly wage rate, employers are required to provide that employee with a written notice of the change within seven (7) days of the effective date of the change. This notice may be given to each employee via a Labor Code 2810.5 form (available online atwww.dir.ca.gov/dlse/LC_2810.5_Notice.pdf), through a written notice explaining the change, or through a wage statement reflecting the change provided within seven (7) days of the effective date. For employers who are not providing paychecks/wage statements by January 7, 2015, employees should receive a separate written notice informing them of the change.
The increase in minimum wage also affects the salary threshold for exempt employees under California’s minimum wage and overtime requirements under the “white collar” exemptions, which include the administrative, executive, and learned professional exemptions. To qualify as exempt under these exemptions, employees must be paid at least double minimum wage. Accordingly, beginning January 1, 2016, California exempt employees must receive an annual salary of at least $41,600 (and higher for computer professionals and highly compensated employees). However, employers should keep in mind that recent proposed regulations from the federal Department of Labor call for an increase in the minimum salary threshold for these exemptions to approximately $970 per week (or $50,440 per year) for 2016, with increases each year to follow. It is anticipated the DOL will issue final regulations in the coming months.
As always, in addition to the compensation requirement, to qualify as exempt, employees must also perform the duties set forth in the applicable Wage Orders and, for computer professional employees, in Labor Code section 515.5. The duties requirements for each of the exemptions are very fact and circumstance specific.
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If you are seeking a business lawyer, or for information on retaining AXIS Legal Counsel to represent your business in connection with any legal matter, contact firstname.lastname@example.org or call (213) 403-0130 for a confidential consultation.
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