As of July 1, 2014, California’s minimum wage is $9.00 per hour. While higher than the federal minimum, ours is not the highest in the world or even in the US. Australia’s is the world’s highest, at $16.88(USD), followed by Luxembourg, Monaco, France, Belgium, New Zealand and several other countries. Meanwhile, Oregon’s minimum beats California’s by a few cents, and Seattle recently imposed a $15 per hour minimum.
Here in California, employers who fail to pay minimum wage can land in very hot water – apart from having to pay the unpaid wages with interest, an employer is on the hook for liquidated damages in the amount of the unpaid wage, attorney fees and the costs of collection. It’s also a misdemeanor and can result in a state agency shutting down your business. Did I mention your own attorney fees defending your company?
Whether you find the new California minimum wage appropriate or appalling, be aware that its impact reaches beyond the lowest rung on the employment ladder.
First, if you know or should know that your employees are not being paid for all of their time, you could be on the hook for unpaid hours going back several years. For example, if you fail to pay employees for mandatory meetings, or calculate commission wages over time spent doing other duties, you may be working employees without pay, with potentially serious consequences.
Even an underpayment, if it cuts into the new minimum wage, could result in penalties, interest, even criminal charges in some cases. And there are a number of lawyers out there who like to bring wage claims as class action cases or as representative actions under California’s PAGA law.
Finally, make sure you’re properly classifying “exempt” or “salaried” employees. In order for a California employee to meet specific exemptions from overtime rules (executive, administrative or professional), he or she must earn a salary that is at least twice the minimum wage. Up to now, that’s been $33,280 a year. As of July 1, that minimum salary increased to $37,440. If you employ a supervisor who oversees two people and meets all the other requirements, but earns less than $37,440 a year, he or she is not exempt and you could be facing a significant liability.
Once you feel you have a handle on California’s minimum wage requirements, listen for another shoe to drop on January 1, 2016, when the state minimum goes to $10 per hour, bringing the “minimum exempt salary” to $41,600 per year.
Mandatory Paid Sick Leave?
By the way, if you think your state Legislators are taking the summer off, think again. Among the bills they may send to the Governor is AB 1522 – which calls for mandatory paid sick leave. While the proposed law only demands that employers give 3 paid days off per year, it calls for accrual of sick leave at an hour for every 30 hours worked – over 8 days per year!Every employer is covered, as is every employee who works more than 7 days a year.
So, what happens to all those extra hours? They “accrue” and carry forward from year to year – employees will see them adding up like dividends on their pay stubs. Under the law as currently written (boy is that a loaded phrase), the accumulated hours don’t get paid out on termination, and there’s no provision for cashing them out. So, unless an employer allows their use, they’ll just sit there, begging a future Legislature to release them into the wild. So stay tuned…
Lou Storrow (Storrow Law APC) is a Carlsbad employment lawyer practicing for over 25 years. He is a former Chairman of the Board of the Chamber of Commerce and represents both employers and employees. He can be reached at 760-929-9141 or at lstorrow@hrlawyer.com.
As of July 1, 2014, California’s minimum wage is $9.00 per hour. While higher than the federal minimum, ours is not the highest in the world or even in the US. Australia’s is the world’s highest, at $16.88(USD), followed by Luxembourg, Monaco, France, Belgium, New Zealand and several other countries. Meanwhile, Oregon’s minimum beats California’s by a few cents, and Seattle recently imposed a $15 per hour minimum.
Here in California, employers who fail to pay minimum wage can land in very hot water – apart from having to pay the unpaid wages with interest, an employer is on the hook for liquidated damages in the amount of the unpaid wage, attorney fees and the costs of collection. It’s also a misdemeanor and can result in a state agency shutting down your business. Did I mention your own attorney fees defending your company?
Whether you find the new California minimum wage appropriate or appalling, be aware that its impact reaches beyond the lowest rung on the employment ladder.
First, if you know or should know that your employees are not being paid for all of their time, you could be on the hook for unpaid hours going back several years. For example, if you fail to pay employees for mandatory meetings, or calculate commission wages over time spent doing other duties, you may be working employees without pay, with potentially serious consequences.
Even an underpayment, if it cuts into the new minimum wage, could result in penalties, interest, even criminal charges in some cases. And there are a number of lawyers out there who like to bring wage claims as class action cases or as representative actions under California’s PAGA law.
Finally, make sure you’re properly classifying “exempt” or “salaried” employees. In order for a California employee to meet specific exemptions from overtime rules (executive, administrative or professional), he or she must earn a salary that is at least twice the minimum wage. Up to now, that’s been $33,280 a year. As of July 1, that minimum salary increased to $37,440. If you employ a supervisor who oversees two people and meets all the other requirements, but earns less than $37,440 a year, he or she is not exempt and you could be facing a significant liability.
Once you feel you have a handle on California’s minimum wage requirements, listen for another shoe to drop on January 1, 2016, when the state minimum goes to $10 per hour, bringing the “minimum exempt salary” to $41,600 per year.
Mandatory Paid Sick Leave?
By the way, if you think your state Legislators are taking the summer off, think again. Among the bills they may send to the Governor is AB 1522 – which calls for mandatory paid sick leave. While the proposed law only demands that employers give 3 paid days off per year, it calls for accrual of sick leave at an hour for every 30 hours worked – over 8 days per year!Every employer is covered, as is every employee who works more than 7 days a year.
So, what happens to all those extra hours? They “accrue” and carry forward from year to year – employees will see them adding up like dividends on their pay stubs. Under the law as currently written (boy is that a loaded phrase), the accumulated hours don’t get paid out on termination, and there’s no provision for cashing them out. So, unless an employer allows their use, they’ll just sit there, begging a future Legislature to release them into the wild. So stay tuned…
Lou Storrow (Storrow Law APC) is a Carlsbad employment lawyer practicing for over 25 years. He is a former Chairman of the Board of the Chamber of Commerce and represents both employers and employees. He can be reached at 760-929-9141 or at lstorrow@hrlawyer.com.
