Beginning July 1, 2014, California employers must comply with several new pieces of legislation. The first phase of California’s minimum wage increase takes effect on July 1. In 2013, California Governor Jerry Brown signed into law AB 10, which amended the California Labor Code to increase the minimum wage. The first phase of this minimum wage increase takes effect July 1, 2014, and increases the mandated minimum wage from $8.00 to $9.00 per hour. The second phase of the minimum wage increase takes effect on January 1, 2016, and increases the mandated minimum wage from $9.00 to $10.00 per hour.
The minimum wage increase also affects exempt employees. Generally, California’s Wage Orders require that any employee classified under the executive, professional, or administrative exemptions be paid a salary of not less than twice the prevailing minimum wage. Once the minimum wage increase takes effect on July 1, 2014, exempt employees will have to be compensated based upon an annual salary of not less than $37,440.
California employers should take prompt action to ensure their wage and hour practices are in full compliance with the new minimum wage law as it relates to all of their employees. For example, certain other employees, such as those who are required to provide their own tools to perform the functions of their job, may also be affected by the minimum wage increase.
In addition to the minimum wage increase, the following revised posting and notice requirements also take effect in California on July 1, 2014:
Employers must prominently display a poster showing the new $9.00 per hour, minimum wage.
Employers must start using an updated workers’ compensation brochure containing new pre-designation regulations. Employers must provide their employees, at the time of hire or by the end of the first pay period, with the workers’ compensation brochure.
Employers must start using updated Paid Family Leave brochures containing new family member definitions, which now include grandparents, grand-children, siblings, and parents-in-law. The brochures should be provided to new hires and to employees who take a qualifying leave.