For minimum wage, California state has one of the highest in the U.S. In addition, many cities and counties in California require an even higher minimum wage for employees.
For 2018 the California minimum wage is set at $11.00 per hour for businesses with 26 or more employees and, for those companies less than 25 workers, the minimum wage in California is $10.50 per hour.
This increase went into effect on January 1, 2018 and those hourly wage amounts will increase to $12.00 and $11.00 consecutively. This can mean that a small business owner with 20 full-time minimum wage employees, for example, will see an annual increase of over $20,800 in actual payroll costs.
And this doesn't take into account the subsequent increase in employment taxes, and so on.
Additional California Minimum Wage Laws
Typically, most employers in California are subject to both the federal and state minimum wage laws. In addition, local entities such as cities and counties, can set their own minimum wage rates.
In fact, throughout California, especially in the Bay Area and in the greater Los Angeles area, there are about 30 additional city and county minimum wage increases that will also went into effect in 2018. These are wage levels that are mandated by the state.
For example, the minimum wage for San Francisco is currently $14.00 per hour and will increase to $15.00 an hour on July 1, 2018.
As noted, there are several cities and other locales in California that have recently enacted ordinances to establish higher minimum wage rates for employees working within their boundaries.What this means, in effect, is that employers are often subject to different government requirements. According to the California Department of Industrial Relations (DIR),
"...when there are conflicting requirements in the laws, the employer must follow the stricter standard; that is, the one that is the most beneficial to the employee."
For a detailed breakdown of the various minimum wage requirements in California, and typical exceptions to minimum wage, here is a graphic guide:
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Be Clear on Exceptions to the Minimum Wage Requirements
There are certain types of employees that are exempt from the minimum wage law in California. These include outside salespersons, individuals who are the parent, spouse, or child of the employer, and apprentices regularly indentured under the State Division of Apprenticeship Standards.
In addition, there are exceptions for certified disables workers, trainees or learners, and apprentices. The specifics and requirements for these minimum wage exceptions are documented in the California Labor Code.
Staying in Compliance With California Minimum Wage Laws
New regulations often increase both the costs and the risks for employers, requiring new workplace postings or changes to existing workplace policies. This includes changing minimum wage requirements. Because of this, it is recommended that all employers consult with experienced employment counsel to ensure payroll compliance.
In addition, new management and compliance practices are required for every HR and every payroll professional. All of this can become burdensome and time consuming. But there are options.
Accuchex, a reputable payroll and workforce management services provider, can not only relieve you of the burden of your ongoing payroll process demands, but can potentially provide other cost-effective solutions, as well.
Call Accuchex Payroll and Workforce Management Services at 877-422-2824 to get your free Payroll Outsourcing Guide, or click the button below and let us help you learn more about your labor law compliance needs.