On January 1, 2023, California’s minimum wage will increase to $15.50 per hour for large employers (those with 26 or more employees). This marks the final step in a series of minimum wage increases that have been implemented in California over the past several years. In this blog post, we will take a closer look at the minimum wage increase and its potential impact on California’s workers and businesses.
The minimum wage increase is part of California’s Minimum Wage Act, which was enacted in 2016. Under the act, the state’s minimum wage has been gradually increasing each year, with the goal of reaching $15 per hour for all employers by January 1, 2023. Large employers have been required to pay the higher minimum wage for several years, while small employers (those with 25 or fewer employees) have been given an additional year to implement the increase. The purpose of the minimum wage increase is to provide a more livable wage for California’s workers. According to the California Department of Industrial Relations, the state’s minimum wage was last increased in 2008, and it had not kept pace with the cost of living. The minimum wage increase is intended to help workers afford basic necessities such as housing, food, and healthcare.
Important Information About California’s Minimum Wage Increase & Impacts On Overtime Exemption
Under California’s overtime laws, certain workers are entitled to receive overtime pay (time and a half) for any hours worked over eight in a single workday or over 40 in a single workweek. However, there are a number of exemptions to these overtime laws, which means that some workers are not entitled to overtime pay.
One of the exemptions to California’s overtime laws is the “white collar” exemption, which applies to workers who are paid a salary and perform certain types of work. In order to qualify for the white collar exemption, an employee must meet certain criteria, including:
With the minimum wage increase to $15.50 per hour, the salary threshold for the white collar exemption will also increase. Starting January 1, 2023, an employee must be paid a salary of at least $64,480 per year in order to qualify for the exemption (based on a 40-hour workweek).
It is important to note that the minimum wage increase does not automatically disqualify workers from the white collar exemption. Whether an employee qualifies for the exemption is still determined by their job duties and the amount of time they spend performing exempt work. However, the increase may cause some workers who were previously exempt to become non exempt and entitled to overtime pay.
Be aware, employers may not necessarily compensate employees fairly simply because the law has changed. If you have reason to believe your employer has failed to compensate you for the hours you’ve worked, speak with an attorney. At the Law Offices of Eric A. Boyajian, our experts are prepared to offer the assistance you need. Contact us online or call us at 818-839-5969 for more information.