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Your Legal Corner - Client Alert Blog

California Minimum Wage Increases Effective in 2016 - 2020

Written By: Melissa C. Marsh, Esq., California Attorney, March 2016 Add to Favorites

Efforts to increase the minimum wage continue.

Effective January 1, 2016, California’s minimum wage is now $10 per hour. While higher than the federal minimum wage (presently $7.25), local cities in California are also moving full steam ahead with even higher local living wages. Employers should be mindful that these minimum wage increase not only affect the minimum amount of pay, but also meal and rest breaks, the minimum wage to qualify as overtime pay exempt, and the amount employees paid on a “piece rate basis” earn. Obviously of greatest concern to the majority of employers is compliance with the overtime pay exemptions for executive, administrative, creative professional, computer software, professional, and commission employees.

California’s 2016 State Minimum Wage.

California’s minimum wage increase also effects the minimum salary that must be paid to overtime exempt executive, administrative, creative professional, and professional employees. Effective January 1, 2016, the new minimum salary required to be exempt from overtime will increase from $37,440 to $41,600. Additionally, effective January 1, 2016, to be exempt from overtime a Computer Software Employee must be paid an effective hourly rate of $41.85, up from $41.27, a monthly salary of at least $7,265.43 (up from $7,165.12), or an annual salary of $87,185.14 (up $85,981.40 ). Similarly, effective January 1, 2016, to be exempt from overtime a Licensed Physicians & Surgeons must be paid an effective hourly rate of $75.24 (increased from $75.24).

Recommendations for Employers

First, update your posters. Second, check your payroll for both exempt and non-exempt employees. Remember to be exempt from overtime, most administrative, executive, and professional employees must earn a minimum monthly salary of at least twice the California minimum wage for full-time employment. Third, ensure that all non-exempt employees – tipped and non-tipped – are paid at least the minimum wage—going to $15 per hour. If you are using a third party payroll processor, confirm that they have updated your account to reflect the minimum wage increases.

Tags: minimum wage, minimum wage
Posted In: 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.