New Year Rings In New Minimum Wage

As we approach the New Year don’t let the commotion of the holidays and the focus on business objectives and budgets for 2016 cause you to forget to evaluate your employees minimum pay requirements. Effective January 01, 2016 California minimum wage is increasing from $9.00 per hour to $10.00 per hour.

What does this mean? You must ensure that your non-exempt employees are paid at least $10.00 per hour for regular work hours and a minimum of $15.00 per hour for overtime work hours.

It also means that some exempt employees may get a raise. Exempt employees must meet both a “duties” test and a “salary” test. The salary test for most exempt positions is two times minimum wage multiplied by 2080 hours. The old minimum annual salary requirement was $37,440.00. As of January 01, 2016 the minimum annual salary requirement is increasing to $41,600.00 for most exempt positions.

It also means that some employers will have higher labor costs. Don’t add to the cost increase by failing to adjust hourly rates and salaries. If you don’t make the adjustments, you are likely to face penalties and fines from the labor commissioner or a court of law.