by Cathleen S. Yonahara
On September 12, a bill that would increase California’s minimum wage passed the California Legislature and was sent to Governor Jerry Brown for his signature. Governor Brown has expressed support for the bill, stating, “This legislation is overdue and will help families that are struggling in this harsh economy.”
Assembly Bill (AB) 10 would raise the current state minimum wage of $8 per hour to $10. Employers would be required to raise wages to $9 per hour by July 1, 2014, and $10 per hour by January 1, 2016. This would be the first minimum wage increase in California in five years. Some Bay Area cities and counties have already raised their minimum wages this year. San Francisco’s minimum wage is $10.55, and San Jose’s is $10.
If Governor Brown signs AB 10, not only would the state minimum wage increase, but the minimum salary requirement for exempt employees under California law also would increase. To qualify as exempt under the executive, administrative, or professional exemptions, an employee must earn a monthly salary of at least twice the state minimum wage for full-time employment. Currently, exempt employees must earn at least $2,773.34 per month. If AB 10 becomes law, the minimum monthly salary for exempt employees would increase to $3,120 on July 1, 2014, and $3,466.67 on January 1, 2016.
October 13, 2013, is the deadline for Governor Brown to approve the proposed minimum wage hike.
For more information on this topic, see the September 23 issue of California Employment Law Letter.