Wednesday, March 9, 2016

2016 Minimum Wages Change and What This Means for Employees Paid By Salary

As of January 1, 2016 the minimum hourly rate of pay in California increased from $9 to $10 per hour. This means if anyone in California is getting paid less than $10 they are being underpaid. The change in minimum wages impacts the minimum salary that may be paid to salaried employees as well. One of the requirements to be exempt from overtime for an employee who is paid a salary is that their salary is at least double the minimum wage. So with this change in minimum wages in 2016, a salaried employee must be paid at least $3,467 a month and $41,600 a year to be eligible for the exemption (there are many other factors that affect the exempt versus non-exempt distinction). For example, if a full-time employee in California is paid $3,000 a month and works more than 8 hours on any given day, more than 40 hours in any week, or seven consecutive days in a week, regardless of job title, they are not correctly classified for wage purposes and are entitled to overtime pay in addition to their salary (and other related penalties and interest).