California Minimum Wage Increase Effective January 1, 2008, and Decrease of Minimum Compensation for Exempt Computer Professionals

Effective January 1, 2008, the minimum wage in California for all industries is $8.00 per hour. In conjunction with this increase, employers must post a copy of the applicable Industrial Welfare Commission ("IWC") wage order in a conspicuous location frequented by employees. Copies of the IWC's wage orders are available at Employers should note, however, that some California cities and counties have their own "living wage" ordinances which are higher than the minimum wage. For example, in the city of San Francisco, the minimum wage is $9.36 per hour.

Employers should evaluate the impact of this increase in the minimum wage on their classification of employees as exempt to ensure that employees will still meet the salary requirements for exempt status (generally, exempt employees must earn a minimum monthly salary of at least two times the minimum wage for full-time employment).

In addition, effective January 1, 2008, the minimum compensation for exempt computer professionals has been reduced from $49.77 to $36 per hour or the annualized full-time salary equivalent of that rate. To be exempt, computer professionals must still satisfy other exemption requirements, including that they primarily perform exempt duties.

California Employers Required to Notify Regarding Eligibility for Earned Income Tax Credit

California employers (defined for purposes of this law as any employer who provides unemployment insurance to employees) must notify employees that they may be eligible for the federal earned income tax credit. The notice may be hand-delivered or mailed to the employee's last known address within one week before or after, or at the same time, that the employer provides an annual wage summary, including, a Form W-2 or Form 1099. Please contact us for the text of the notice or see Section 19854 of the California Tax Code at

California Law Prohibits Forced Implantation of Identification Devices

California Senate Bill 362 precludes any person from requiring, coercing, or compelling another to undergo the implantation of an identification device under or on the skin and specifically prohibits conditioning employment on consent to implantation. For purposes of the bill, "identification device" means any item, application, or product that is capable of transmitting personal information, including, but not limited to, devices using radio frequency technology. Violators of the bill may be subject to civil penalties of up to $10,000 per day until the violation is corrected. Victims of illegal implantation may also bring civil actions for damages and injunctive relief. California joins the states of North Dakota and Wisconsin, which have adopted similar bans.