California’s minimum wage increasing on January 1, 2023 to $15.50 per hour. This Friday’s five reviews how the increase impacts California’s employers and addresses considerations for how employers deal with the patchwork of local jurisdictions that have their own minimum wage requirements:
1. White Collar Exemptions – Salary Requirement Tied to State Minimum Wage
California’s employment laws classify employees into two main categories: exempt employees and nonexempt employees. Federal and state laws exempt certain employees from wage and hour requirements. An exempt employee is an individual who is exempt from any overtime pay or minimum wage requirements. The “white collar” exemptions are: Professional, Executive and Administrative. To qualify as an exempt employee, the employer bears the burden to meet the requirements of a two part test the employees must meet to be exempt: (1) the salary basis test and (2) the duties test. The salary basis test requires that the employee must be paid a salary that is at least two times the state minimum wage, which will increase as California’s minimum wage increases.
In light of the new increase to the California minimum wage, effective January 1, 2023, the minimum annual salary to meet the white collar exemption increases to $64,480.00. For more information on exempt employee classifications, see our prior article here.
2. Computer Professional Exemption Salary Requirement Increases in 2023
Labor Code section 515.5 sets forth that...
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