Over a month into the new year, many employers in California are feeling the impact of new labor laws, especially increased minimum wages.
As California employers are aware, the minimum wage in California increased to $10.00 per hour last January 1, 2016. The minimum increased once again this last January 1 to $10.00. Currently, this labor law is for employers with 26 or more employees.
However, beginning in 2018, this requirement will apply to all employers, including those with fewer than 26 employees. This minimum wage increase plan has now been in it's second year for less than two months. And employers are noticing the effect.
It was estimated that thee increase in just wage costs alone for California employers will amount to an immediate jump of almost five and any associated increases required to accommodate employees already earning close to that amount.
Employee Exceptions to Minimum Wage Law
The wage law allows that some employees are exempt from the minimum wage requirement. This includes outside salespersons, a parent, spouse, or child of the employer, and apprentices who are regularly indentured according to California State Division of Apprenticeship Standards.
While a minimum wage rate is established by the federal government, many states currently have enacted minimum wage requirements that are higher than the federal rate. The most recent federal increase went into effect in July 2015. This latest increase by the federal government mandated a national minimum wage level of $7.25 per hour. Some states, such as California, currently require as much as $3.25 more per hour.
Here are the planned increases in the California minimum wage for the next four years:
Local Minimum Wage Increases Since January 2017
In 2016 the city of San Mateo council approved an ordinance to increase their minimum wage to $15 by 2019. Previous to this, there were no cities in San Mateo County with a minimum wage above the state rate. The new city rate, which is increased to $10.50 on January 1, 2017, will ultimately increase to $15 by 2022.
In addition, voters in San Diego approved an Earned Sick Leave and Minimum Wage Ordinance in June of 2016, but the effective date was initially delayed until those election results were certified. Once that was completed the new wage ordinance took effect on July 11, 2016.
Employees working within the geographic boundaries of the City of San Diego must now be paid a minimum wage of at least $11.50 per hour since January 1, 2017, and beginning on January 1, 2019, the minimum wage in San Diego will be tied to the Consumer Price Index and will be adjusted based on subsequent increases in the cost of living.
California Cities With Additional Minimum Wage Laws
Since 2016 there were at least 28 cities, towns or municipalities in California that have their own minimum wage laws and ordinances. This even includes the Jackson Rancheria Band of Miwok Indians Casino's and Resorts which has instituted it's own minimum wage requirements.
In addition, local minimum wage increases have been established in all of Los Angeles City and County, San Francisco, Oakland, Berkeley, Santa Clara, San Jose and Sacramento.
Here is a list of California locations that have enacted their own minimum wage requirements:
Navigating California Labor Laws and Minimum Wage Requirements
Many of these new regulations expand the scope of costs and risks for employers, and require new workplace postings or changes to existing workplace policies. We recommend that all California employers consult with experienced employment counsel to ensure compliance.
Accurate and timely management and compliance practices are required for every business and every payroll professional. But there are options.
Accuchex, a reputable payroll management services provider, can not only relieve you of the burden of your ongoing payroll process demands, but can potentially prove to be a more cost-effective solution, as well.
Get your Free Download: Payroll Outsourcing Guide or click the button below and let us help you make an informed decision about our payroll solutions. You can also call Accuchex Payroll Management Services at 877-422-2824.