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Minimum Wage Increases on Jan. 1

Published Thursday, December 27, 2018
by Gail Cecchettini Whaley, Esq.

The Department of Industrial Relations has issued a notice reminding employers of the upcoming minimum wage increases.

Under legislation to increase the minimum wage to $15 per hour over time, California’s minimum wage will increase on January 1 to:

• $12 per hour for employers with 26 employees or more
• $11 per hour for employers with 25 or fewer employees

Some cities and counties have a local minimum wage that is actually higher than the state rate. For more information see CEA’s Minimum Wage and Paid Sick Leave Fact Sheet.

Ripple Effect for Exempt Employees

The minimum wage rate will also affect your pay scale for exempt employees. The administrative, professional and executive exemptions require the worker to earn two times the state minimum wage for full-time employment in order to be classified as exempt (and meet a strict duties test).

For 2019, this means that an exempt (salaried) worker will need to earn at least:

• $49,920 to be exempt if there are 26 or more employees
• $45,760 to be exempt if there are 25 or fewer employees

It may be time for you to hand out some raises or move a salaried employee’s status to a non-exempt hourly rate of pay. We can help coach you through those difficult discussions. For more information, see CEA’s 2019 Minimum Salary and Minimum Wage (State) Fact Sheet.

Finally, California employers must post information on wages, hours, and working conditions at a worksite area accessible to employees. This includes an IWC wage order and additional postings.

CEA’s all-in-one poster provides the newest laws required by California, Federal and OSHA regulations to meet business requirements to protect employers from posting fines and employee disputes—including the new California minimum wage order.

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