January 2016 Minimum Wage Increase
Way back in 2013, we knew that things were changing. That was when the California Legislature enacted legislation that would raise the minimum wage for the entire state. They proposed a two-step process, with the first being an increase to $9.00 an hour in January of 2014, and the second step now just a few months away – kicking off in January of 2016.
So what’s changing, and what do you need to know in order to ensure your company remains in compliance?
Show Me the Money
The most obvious (and talked about) change for 2016 is going to be yet another increase to the minimum wage. Once January 1st rolls around, companies in all industries will have to begin paying their workers at least $10.00 an hour. That’s right – all industries. Which means even restaurants and bars, where employees generally benefit from tips as well, will be expected to honor this increase.
Hopefully by now, you have already posted the new California Minimum Wage Posting in a location where all of your employees can see it. That was required to go up by July 1, 2014 – so if you haven’t taken care of that yet, you can contact Allevity to purchase an all-in-one labor law poster.
What About Exempt Employees?
It’s not just hourly employees who will be benefiting from this minimum wage increase, though. Some of your exempt employees may be due a raise as well. As of right now, the minimum annual salary for exempt employees is $37,440. But starting on January 1, 2016, they will be due a boost to $41,600.
Of course, now may also be a good time to revisit your job descriptions and conduct and FLSA Exemption Audit to ensure that your exempt employees truly do qualify as exempt. Employees in positions that don’t meet the qualifications should be eligible for overtime at the new wage.
Food and Lodging, Too?
But that’s not all! Employees who travel for work may also be seeing some changes. This mostly applies to the amount spent on meals and lodging that can be credited against the minimum wage. First of all, nothing can be credited without the employee’s voluntary written consent. But once that agreement is made between employee and employer, the maximum amount that can be credited for a room occupied alone will now increase from $37.63 per week to $42.33. For meals, breakfast will be eligible for credit at $3.62, lunch at $4.97 and dinner at $6.68
If you haven’t already started making changes to your policy and addressing your accounting systems in order to comply with these changes come January 1st, now is the time to start actively working towards that goal. At Allevity, we can help to ensure you have systems in place to keep you seamlessly in compliance come the New Year.