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New Minimum Wage Reminder

Thomas M. Lee

Employers should be reminded that starting on July 1, 2014, the California minimum wage will be $9.00. This affects not only all minimum wage earners, but also executive and administrative overtime exempt employees.

One of the factors that determines whether an employee is exempt from the laws requiring overtime wages is whether they are paid a fixed salary of at least two times the minimum wage for full time employment. With the new $9.00 minimum wage, the fixed salary must be at least $37,440.00 per year ($9.00 X 2 X 40 hours X 52 weeks). This means that if an exempt employee receives less than $37,440.00 as an annual salary, then that employee is entitled to overtime wages.

As a further reminder, the minimum wage is also set to increase again to $10.00 on January 1, 2016.

Finally, the California state senate approved a bill last week which would set the minimum wage at $13 an hour by 2017. After 2017, the minimum wage would rise each year to keep pace with inflation.

Under the bill, it would go to $11 an hour in 2015, $12 an hour in 2016 and $13 an hour in 2017.

Employers should note that cities in California already have the right to set a higher minimum wage. In San Francisco, for example, the minimum wage is $10.74. In the North Bay, the city of Sonoma’s minimum wage is set at $15.38, the highest municipal minimum wage in the United States.

Please note that the information I am providing here in this entry, or in my website is NOT to be construed as legal advice nor is it meant to form an attorney-client relationship. For a free legal consultation by phone, please call or email me anytime.

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