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Your Legal Corner - Client Alert Blog

California Minimum Wage Increases to $9 on July 1, 2014

Written By: Melissa C. Marsh, Esq., California Attorney, June 2014 Add to Favorites

On July 1, 2014, California’s minimum wage increases to $9 per hour, up $1 from $8 per hour. On January 1, 2016, California’s minimum wage increases will again increase to $10 an hour.

This not only effects those employers with employees who earn the minimum wage, but also employers who have overtime exempt employees. Remember that to qualify for many of California's exemptions from overtime, the employee must be paid at least twice the minimum wage. Effective July 1, 2014, to be exempt under the executive and administrative overtime exemptions, the employee must receive a monthly salary of at least $3,120.00, or $37,440 per year.

Employers with employees who earn commissions must also be mindful of this new wage increase. To be exempt under the commissioned salesperson overtime exemption, California requires employees who work on commission to receive at least 1.5 times the minimum wage for each hour worked with at least half of the employee’s earnings representing commissions. An increase in the minimum wage creates a corresponding increase in the amount of commissions that must be earned to maintain the exemption.

Before July 1, 2014, all California employers should:

1. Review the hourly rate and/or salary paid to each employee, with particular attention on employees who are presently being paid the state's minimum wage and on employees classified as exempt from overtime; If any of the employees wage rates are borderline, the employer should consider adjusting said wages upward to ensure continued compliance with the state's new $9 minimum wage and overtime rules; and

2. Review the wage and commission split of each employee that is paid on a commission to ensure continued compliance with the state's new $9 minimum wage and overtime rules.

Tags: California minimum wage, minimum wage, minimum wage
Posted In: Business Law Bulletin  Corporate Client Bulletin  Employment Law News 

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Disclaimer: The information presented on this web site was prepared by Melissa C. Marsh for general informational purposes only and does not constitute legal advice. The information provided in my articles and alerts should not be relied upon, or used as a substitute for professional legal advice from an attorney you retain to advise or represent you. Your use of this Internet site does not create an attorney- client relationship. Transmission of this article is not intended to create, and receipt of it does not constitute, an attorney-client relationship. All uses of the contents of this site, other than personal uses, are prohibited. You may print or email a copy of any information posted on this web site for your own personal, non-commercial, use, but you may not publish any of the articles or posts on this web site without the Express Written Permission of Melissa C. Marsh.

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Located in Los Angeles, California, the Law Office of Melissa C. Marsh handles business law and corporation law matters as a lawyer for clients throughout Los Angeles including Burbank, Sherman Oaks, Studio City, Valley Village, North Hollywood, Woodland Hills, Hollywood, West LA as well as Riverside County, San Fernando, Ventura County, and Santa Clarita. Attorney Melissa C. Marsh has considerable experience handling business matters both nationally and internationally. We routinely assist our clients with incorporation, forming a California corporation, forming a California llc, partnership, annual minutes, shareholder meetings, director meetings, getting a taxpayer ID number (EIN), buying a business, selling a business, commercial lease review, employee disputes, independent contractors, construction, and personal matters such as preparing a will, living trust, power of attorney, health care directive, and more.