With all the new employment-law changes going into effect on Jan. 1, it can be easy to forget the changes that were set in motion years ago. For that reason, we remind you that California’s minimum wage is increasing (again) for all employers, and the overtime thresholds for agricultural employees working under Industrial Welfare Commission Wage Order No. 14-2001 are decreasing. Here is a quick re-fresher:
Minimum Wage Rates Increase
In 2017, California’s minimum wage began a series of increases intended to raise the state minimum wage to $15.
The next increases take effect on Jan. 1, as the state minimum wage will increase to $12 per hour for employers with 25 or fewer employees and to $13 per hour for employers with 26 or more employees.
While these increases obviously affect employees earning minimum wage, these increases also raise the minimum salary requirement for exempt personnel. (To be classified as exempt from minimum-wage, overtime-pay and time-recordkeeping require-ments, an employee must meet both a “duties test” and a “salary test.”)
Effective Jan. 1, the minimum salary for exempt employees of employers with 25 or fewer employees will increase to $49,920 per year (or $4,160 per month), and to $54,080 per year (or $4,506.67 per month) for exempt employees of employers with 26 or more employees.
Wage Order 14 Overtime Thresholds Decrease
In 2016, Assembly Bill 1066 set in motion the gradual lowering of the daily and weekly hours of work thresholds for paying overtime to non-exempt agricultural employees working under Wage Order 14.
Effective Jan. 1, the overtime thresh-olds for non-exempt employees of employers with 26 or more employees will be nine hours per workday or 50 hours per workweek. For non-exempt employees of employers with 25 or fewer employees, the overtime thresh-old is still 10 hours per workday.
Overtime pay for work done on the seventh consecutive day of work in a workweek remains the same as in the past.
Determining If You Have 26 or More Employees
As previously explained, because the requirements depend on whether an employer has 26 or more employees, it is important to understand how employees are counted.
An employer’s own direct-hire employees and any employees of a farm labor contractor provided to the employer must be counted together. In addition, if an FLC has 26 or more employees, then the FLC’s employees are entitled to the large-employer rates regardless of how many employees are located at their jobsites.
Employers with questions about minimum wage or overtime thresholds, or about how employees are counted under these rules, are encouraged to contact Barsamian & Moody at (559) 248-2360. Given the substantial liability that can result from wage-and-hour violations, this is one area you absolutely want to make sure you are compliant with.
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