2016 brought with it a host of new legislation for California employers. With the passage of the Fair Pay Act, new piece rate legislation, family time off, and the expansion of Unruh to give stronger protection to immigrants, to name a few, it is understandable if employers are having a hard time keeping up. Unfortunately, while understandable, “we can’t keep up” is not a defense to an employment claim. With that in mind… It is important for all California business owners to remember that the minimum wage has increased this year.
As of Jan. 1, the state minimum wage has increased from $9 per hour to $10 per hour. This change not only impacts non-exempt workers, but the classification of most exempt workers. In addition to strict “duties tests” for administrative, executive and professional wage and hour exemptions, a salary of at least twice the state minimum wage must be paid to meet the “salary basis test.” To satisfy the “salary basis” test, an employee must be paid (1) on a guaranteed, minimum salary basis that cannot be reduced no matter how many hours are actually worked; and (2) a minimum salary of at least two times the state minimum wage. This raises the annualized exempt salary requirement to $41,600, up from $37,440. The retail industry is also impacted, as the inside-sales exemption requires employees be paid at least 1.5 times the state minimum wage, and at least half of their other earnings be from commissions.Details