Effective Jan. 1, 2016, the minimum wage in California increased about 11 percent, rising from $9/hour to $10/hour. This hike has increased the California minimum wage to $2.75 more than the federal minimum wage of $7.25, which has not been increased in more than six years.
Commenting on the importance of this minimum wage increase, San Francisco Democrat Mark Leno has explained that:
Despite our recovering economy, millions of Californians, many of them children, continue to live in poverty… Full-time workers in this state should not be forced onto public assistance simply because they earn the minimum wage.
Impacts of the California Minimum Wage Hike on Salaried Employees
The new California minimum wage applies to “almost all employees in California” (with only “some exceptions”), according to the California Department of Industrial Relations (DIR). Employers will have to not only pay a higher minimum wage to “nonexempt” employees who are paid per hour but will also have to pay more to salaried “exempt” workers in order to maintain their exempt status.
For salaried exempt workers, California employers are required to apply the “Duties Test,” as well as the “Salary Test,” in order to continue to classify these workers as salaried exempt. In terms of the Salary test, this means that the salary paid to exempt workers must be at least two times as much as the minimum wage earned by a full-time worker over a year. The minimum salary for an exempt worker must now be least $41,600 – double the new annual minimum wage earnings of $20,800 for a full-time worker.
More Minimum Wage Increases May Be in California’s Future
As employers and workers adjust to the new minimum wage in California, another increase may be around the corner. That is because, this November, voters will be presented with an initiative to add $1 to the state minimum wage each year until it reaches $15 by 2021. 1
As more news about changes to the California minimum wage become available, we will provide you with the latest updates here, in a future blog.
Contact a Los Angeles Employment Lawyer at Broslavsky & Weinman, LLP
If you have been the target of an employer’s wage and/or hour violations, contact a Los Angeles employment lawyer at Broslavsky & Weinman, LLP to learn about your legal rights and options. You can contact us by calling (310) 575-2550 or by emailing us using the contact form on this page to set up a free initial consult with one of our lawyers.