City and County Minimum Wage increases for non-exempt
Effective July 1, 2016
California cities and counties have passed numerous minimum wage ordinances, many of which update on July 1, 2016. Minimum wage increases include the following:
- El Cerrito – $11.60 per hour
- Emeryville – $13.00 per hour if your business has 55 or fewer employees; $14.82 per hour if your business has 56 or more employees
- Los Angeles (City and Unincorporated County) – $10.50 per hour if your business has 26 or more employees
- Pasadena – $10.50 per hour if your business has 26 or more employees
- San Francisco – $13.00 per hour
- Santa Monica – $10.50 per hour if your business has 26 or more employees
- Sunnyvale – $11.00 per hour
These wage amounts apply only to non-exempt (hourly) employees. Exempt salaries are based on the statewide minimum wage, and will not increase in July 2016.
Keep in mind that in addition to increasing hourly pay amounts for non-exempt (hourly) employees, you must also post notices confirming the new minimum wage with your other wage and hour posters. These minimum wage notices must be in English, and several cities/counties also require posting in other languages depending on the composition of your workforce.
New federal FLSA Minimum Wage increases for exempt employees
Effective December 1, 2016
On May 23, 2016, the Department of Labor updated its regulations regarding minimum salary payments that must be paid to exempt (salaried) employees. These new rules go into effect on December 1, 2016.
The major change that impacts California is that employees in the “white collar” exemption categories of administrative, executive, and professional must meet a new minimum salary threshold of $47,476.00 per year, starting on December 1, 2016.
If your exempt salaried employee is not being paid at this rate, he or she will need to convert to a non-exempt (hourly) employee and will be eligible for overtime payments starting on December 1, 2016.
California Statewide Minimum Wage increases for non-exempt employees
Effective January 1, 2017
As a quick reminder, Gov. Jerry Brown signed legislation in April 2016 to increase the statewide minimum wage. The first statewide minimum wage increase will take effect on January 1, 2017.If your business has 25 or more employees, the statewide minimum wage for non-exempt (hourly) employees will increase to $10.50 per hour, effective on January 1, 2017.
If your business has fewer than 25 employees, the statewide minimum wage for non-exempt (hourly) employees will remain as $10.00 per hour.
If your locality has a higher minimum wage requirement, you must pay the higher wage to your non-exempt (hourly) employees as per the local ordinance.
The April 2016 legislation also included increases to the minimum annual salary rates for exempt (salary) employees – however, at this time the federal law changes that go into effect on December 1, 2016, are at a higher salary amount, so exempt (salary) employees will not see any additional wage increase on January 1, 2017.