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What You Need to Know in 2019 Series: California's Minimum Wage Updates (2 of 6)

What You Need To Know in 2019 Series: 
California’s Minimum Wage Updates
2 of 6

 

California’s 2019 Minimum Wage Updates

This year a variety of Minimum Wage changes are occurring across the state of California. Do you know what you have to do as an employer and when? Read more about these important updates to Minimum Wage law below.

 
Increased State Minimum Wage:

  • Effective January 1, 2019, California’s minimum wage increased to $12.00 per hour for employers with 26 or more employees and to $11.00 per hour for employers with 25 or fewer employees (subject to higher local minimum wage requirements).
  • The minimum salary requirement for exempt employees increased as a result.  Employees must earn a salary of at least 2 times the state minimum wage.
    • (2 x $12.00) x 2080 hours = $49,920.00 per year / $4,160.00 per month / $960.00 per week.
  • California’s statewide minimum wage will increase to $15 an hour by 2022 for larger employers and by 2023 for smaller employers:

 
Bay Area Minimum Wage Ordinances:

Various Bay Area cities are enacting different Minimum Wage increases at different times throughout the year. Make sure you are keeping pace with your city’s ordinances by checking the table below!

City

Minimum Wage/Hour

Effective Date

Belmont

$13.50

1/1/19

Berkeley

$15.00

$CPI increase

1/1/19

7/1/19

Cupertino

$15.00

1/1/19

El Cerrito

$15.00

1/1/19

Emeryville

$15.69 (large employer  56 +)

$15 (small employer 55 -)

$CPI increase

7/1/18

7/1/19

Los Altos

$15.00

1/1/19

Milpitas

$13.50

$15.00

7/1/18

7/1/19

Mountain View

$15.65

1/1/19

Oakland

$13.80

1/1/19

Palo Alto

$15.00

1/1/19

Redwood City

$13.50

1/1/19

Richmond

$15.00

1/1/19

San Francisco

$15.00

$CPI Increase

7/1/18

7/1/19

San Jose

$15.00

1/1/19

San Leandro

$13.00

$14.00

7/1/18

7/1/19

San Mateo

$15.00

1/1/19

Santa Clara

$15.00

1//1/19

Sunnyvale

$15.65

1/1/19



 
Other Local California Minimum Wage Ordinances:

  • The following California cities are also updating their Minimum Wage Ordinances. Check individual city ordinances for specific requirements.
    • City and County of Los Angeles
    • Malibu
    • Pasadena
    • San Diego
    • Santa Monica

 
What Should Employers Do About These New Minimum Wage Ordinances?

  • Review current salaries and job duties/job descriptions. Determine which salaries you can afford to raise to retain exempt status and whether the job meets the “duties test.”
  • Analyze hours worked and overtime. Would converting exempt salary to hourly reduce your payroll or would it be the same? Weigh advantages and disadvantages.
  • Determine whether you need to lower the hourly rates. That way when you convert from exempt to hourly, the total earnings remain the same.
  • Market the change. Many employees view “salary exempt” status as a success threshold.  They may receive the message that they are being converted to hourly as some kind of demotion.

 
California “Wage Order” Revisions:

  • Industrial Welfare Commission (“IWC”) established “Wage Orders”
  • IWC Wage Orders Numbered 1 – 17 lay out required wages, hours, working conditions for various industries and occupations including:
    • Hours and days of work
    • Minimum wages
    • Overtime
    • Alternative workweeks
    • Reporting time pay
    • Special subminimum wages for certain disabled workers
    • Record retention
    • Cash shortage and breakage
    • Uniforms and equipment
    • Meals and lodging
    • Meal periods
    • Rest breaks
    • Change rooms/resting facilities
    • Seats
    • Temperature
    • Elevators
  • Many Wage Orders recently updated to reflect 2019 increases to minimum wage and meal and lodging rates  (All except IWC Wage Orders 14 and 17)
  • IWC Wage Orders are enforced by Division of Labor Standards Enforcement (“DLSE”) AKA “The Labor Commissioner”

 
What Should Employers Do About These New Wage Order Revisions?

 
Why Does Minimum Wage Matter So Much?

Minimum Wage has an impact across the pay practices board. Make sure to familiarize yourself with the potential repercussions of this year’s Minimum Wage updates.

  • Minimum Wage affects the following pay practices (and more):
    • Minimum Wage Rates
    • Overtime Rates
    • Exempt/Non-Exempt Classifications
    • Posting Requirements
    • Notice Requirements (Labor Code section 2810.5)
    • Meals and Lodging
    • Piece Rate Employees
    • Draws Against Commissions
    • Tools/Equipment




This update the second of six, don’t miss out on the remainder of the What You Need To Know in 2019 Series.

What You Need To Know in 2019 Series: San Franci...
What You Need to Know in 2019 Series: California's...

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