A REMINDER TO OUR CLIENTS

The California state minimum wage will increase on January 1, to $12 per hour for employers with 25 or fewer employees and to $13 per hour for employers with 26 or more employees.

In addition to state laws, California businesses will also need to pay attention to local ordinances and upcoming changes for January 1.

The minimum wage increase also increases the salary threshold for exempt positions under the FLSA. FLSA thresholds in California are specific to Administrative, Executive, and Professional exemptions, each with distinct thresholds. The new wage requirements will be:

Under 26 employees: $49,920

26 employees or more: $54,080

Essential HR INC. recommends that our clients conduct a payroll audit before the end of the year to ensure that the exempt salary threshold is adjusted if needed. Additionally, we recommend capitalizing on this time to conduct an FLSA Exempt Audit on all of your exempt level positions/job descriptions. This will not only verify that the salary threshold is met, but delineate that duties and test guidelines for the various FSLA categories successfully qualify the position as exempt. Misclassification of exempt employees creates liability for unpaid meal/rest periods, overtime, and fines and penalties. For assistance in conducting a FLSA Classification audit, reach out to us, your trusted partner.