California Minimum Wage Increase

On January 1, 2019, the state minimum wage in California increased again. It is now $12.00 per hour for employers of 26 or more employees and $11.00 per hour for employers of 25 or fewer employees.

The increase in the state minimum wage increases other minimum thresholds as well. For employers of 26 or more employees, the minimum salary for an employee to qualify for the “white collar” overtime exemptions is $49,920.00 annually, $4,160.00 per month, or $960.00 per week. For employers of 25 or fewer employees the minimum salary is $45,760.00 annually, $3,813.33 per month, or $880.00 per week. Even if an employee meets all of the duties requirements for the exemption, he or she must still be paid the applicable minimum salary in order to be exempt from overtime. Employers with lower-paid exempt employees should therefore review salaries to ensure they meet the 2019 thresholds.

For employers of 26 or more employees, “inside sales” employees must earn at least $18.01 per hour to qualify for the exemption from overtime, and for employers of 25 or fewer employees “inside sales” employees must earn at least $16.51 per hour. In addition, more than half of the compensation of all such employees must be in the form of commissions in order for the exemption to apply, and the “inside sales” exemption is available only to employers covered by Wage Orders 4 and 7.