July 1st is Right Around the Corner - Are you Ready?
California employers know that minimum wage in this state is on a pretty fast track to $15 an hour. However, depending on where you live within the state, different municipalities are hiking up at a faster pace than that, and on July 1, 2017, several local cities will increase their minimum wages above the current $10.50 an hour that California currently requires.
If your business is domiciled in California but you employ employees in any of these municipalities, your minimum wage is governed by where these employees work, NOT by where your business is located. In fact, even if your business is located OUTSIDE the state of California, if your employees are temporarily working within the state of California and in one of these cities for more than a day or two, you will have to pay at these higher wages.
So, if your business employs 26 or more employees in total (NOT just within these cities), the minimum wages within these cities will go to these dollar amounts as of July 1, 2017:
Santa Monica: $12
Unincorporated Los Angeles County: $12
And in Northern California...
San Francisco: $14
San Jose: $12
San Leandro: $12
Also remember, the state minimum wage will go to $11 as of January 1, 2018. At that time, split shift pay and the salary test for exempt employees will be impacted, as they are determined by the state minimum wage. Keep in mind that split shift pay and the salary test do NOT change when the local minimum wage increases, as those are state laws. On the other hand, if you are paying a meal break premium, because an employee is missing the required 30 minute meal break, that one hour pay is paid at the employee's actual wage. Consequently, your meal break pay will go up accordingly.
We recognize that wage and hour law is extremely complicated, so as always, if you have questions about how this minimum wage hike or any other aspect of these laws affects your business, please feel free to reach out to us at Raines Feldman LLP.