Effective July 1, 2014, the California minimum wage increases to $9.00 per hour (from $8.00). It will increase further to $10.00 per hour effective January 1, 2016. Employers must post the applicable California Department of Industrial Relations Wage Orders, including new MW-2014, which has been updated to reflect the new minimum wage. There are 17 industry or occupation-specific Wage Orders, copies of which are available from the Division of Labor Standards Enforcement, as well as from employer trade associations.
As explained in our January 2014 “New Year, New California Employment Laws” Legal Alert, a less-advertised consequence of this increase is the impact it will have on the salary test for preserving an employee's exempt status. Under California law, a supervisor classified as exempt must be paid a monthly salary that is no less than two times the wages paid to a full-time minimum wage employee. After July 1, 2014, the minimum monthly salary to preserve exempt status under California Labor Code section 515, will rise to $3,120 per month, annualized to $37,440. In addition, the penalties available for minimum wage violations will now include “liquidated damages.”