Minimum Wage Increases

Effective January 01, 2019, California’s minimum wage will increase one dollar per hour across California. For businesses with less than 25 employees minimum wage will rise from  $10.50 per hour to $11.00. For businesses employing 26 or more employees the minimum pay will go from $11.00 per hour to $12.00.

In addition to your nonexempt, hourly staff getting raises, this also means that some exempt employees may get a raise as well. Consistent with California law, exempt employees must meet both a “duties” test and a “salary” test. The minimum salary test for most exempt positions is two times minimum wage multiplied by 2080 hours. Please note that these changes will also affect inside sales commissioned employees and employees who are required to provide and maintain their own hand tools as customarily required by their trade or craft.

Finally, there are several local ordinances within California that require a higher minimum wage than the state, regardless of company size, and you should familiarize yourself with the cities that have instituted such ordinances if you have a transient workforce.  Failure to make the necessary adjustments could likely result in fines from the labor commissioner or a court of law.