Allevity Blog

5 Things You Didn't Know About the California Minimum Wage Increase on 7/1/2014

Jun 4, 2014

When Governor Jerry Brown signed into law a bill that increases California’s minimum wage to $9.00 effective 7/1/14 and $10 effective 1/1/16, we’re betting most employers didn’t consider the other compliance areas of their business that will be affected.  Here are some other things to consider:

1. Exempt Employees

One eligibility requirement under the Executive, Administrative, and Professional Exemptions is the employee must earn a monthly salary equivalent to no less than two times the state minimum wage.  This means effective 7/1/14, the minimum salary test will increase to $37,440 annually or $18 per hour and effective 1/1/16 to $41,600 or $20 per hour.

2. Commission Exemption

Employees whose earnings exceed one and one-half times the minimum wage and more than half their compensation represents commissions could be exempt from the overtime provisions under Section 3 of California Wage Orders 4 and 7. Employer would need to ensure these individuals earn at least one and one-half times the new state minimum wage. 

3. Tools or Equipment

Generally, when tools or equipment are required by the employer or are necessary to the performance of a job, they must be provided and maintained by the employer. However, employees who earn at least two times the state minimum wage can be required to provide and maintain their own hand tools and equipment customarily required by the trade or craft under Section 9 under most California Wage Orders

4. Voluntary Credits for Meals and Lodging

Employers with voluntary written agreements with employees for crediting meals or lodging against the employer’s minimum wage obligation should adjust their crediting accordingly under Section 10 of most California Wage Orders. 

5. Split Shift Premiums

Any worker who earns minimum wage and has two distinct work periods separated by more than a one-hour meal period must receive one hour’s pay at no less than minimum wage.

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