Beginning this year, there have been some major changes made to minimum wage requirements in California. There have been various news outlets and social media posts confusing the facts about what these new wage requirements actually mean. We’re here to clear some of the confusion.

Minimum salary requirements have not been increased since 2004. Current changes are being advertised as “New Overtime Rules,” causing a lot of confusion with many employers. If you operate a business within California, the minimum salary requirement has increased and continues to be much higher than the federal requirements. California employers must comply with the higher rate and ensure that any employees exempt who live outside of California, you must confirm that they make at least $35,568 annually.

California’s minimum wage has also increased this year. It went up to $12/hour for companies with 25 employees or less and $13/hour for companies with 26 or more employees. This rate will increase annually until it reaches $15/hour in 2023 for the smaller companies and in 2022 for the larger companies. 

San Diego, specifically, has a minimum wage ordinance effective for all companies who operate within the San Diego city limits. Including companies who work two or more hours a week within the San Diego area, like an employee who travels to different job sites, or deliver within San Diego for at least 2 hours a week.

The minimum wage has also increased to $13/hours for all the employers who fall into the San Diego wage requirements, regardless of the size of their company. This minimum wage could also increase annually based on the consumer price index. San Diego’s minimum wage requirement has no effect on the minimum salary requirements for exempt employees in California. 

The minimum salary and wage requirements are mandatory if you hope to keep your employees classified as exempt. You are able to reclassify employees who fall below this requirement into an hourly rate employee. Ensure that these employees track all hours worked, for example clocking in and out for meals and ensure that they are compensated for any overtime. 

As the wage and salary requirements continue to change ensure that you are keeping up with the California standards to protect your employees and your company. This is only one aspect to making sure your employees have higher job satisfaction. Contact us for more information on how to create a company culture that thrives.