by Michael Futterman and Jaime Touchstone
As fast-food and other low-wage workers protest for pay raises and President Barack Obama pushes for a higher federal minimum wage, California employers need to prepare for a $1 increase in the state’s minimum wage. California’s minimum wage will rise to $9 an hour on July 1 before hitting $10 an hour in 2016.
Certain types of employees such as outside salespersons, apprentices, and learners may be exempt from minimum wage requirements, but in general, the requirements apply regardless of whether employees are paid on an hourly, commission, or salaried basis. Under the California Wage Orders, employees are considered learners during the first 160 hours of employment in occupations in which they have no related experience. Learners may not be paid less than 85 percent of the minimum wage, rounded to the nearest nickel.
Paying employees less than the applicable minimum wage is unlawful, and an agreement between an employer and an employee to do so is unenforceable. California’s Labor Code and the federal Fair Labor Standards Act (FLSA) establish penalties for minimum wage violations as well as citation and hearing procedures used to adjudicate minimum wage disputes.
The 2014 and 2016 minimum wage increases may not be the only ones on the horizon. Senate Bill 935, which passed the California Senate on May 29 and was sent to the California Assembly, is designed to replace the approved minimum wage increase with a larger increase to $13 per hour over a three-year period and tie the minimum wage to the California Consumer Price Index beginning January 1, 2018.
In addition to increases at the state level, some cities have passed their own minimum wages that top the state’s rate. For example, San Francisco and San Jose have set local minimum wages at $10.74 and $10.16 per hour, respectively.
For more information on the California minimum wage, see “California blazes trail toward higher minimum wage” on page 2 of the April 28 issue of California Employment Law Letter.
The authors can be reached at Futterman Dupree Dodd Croley Maier LLP in San Francisco, mfuttman@fddcm.com and jtouchstone@fddcm.com.