Effective July 1, 2014, the minimum wage increased from $8.00 an hour to $9.00 an hour. The minimum wage will increase a second time on January 1, 2016 to $10.00 an hour. (Labor Code § 1182.12.) Due to this change in the law, local educational agencies should review their pay practices and ensure they are in compliance with all wage and hour laws.
Most California employees must be paid at least the state minimum wage. Accordingly, employers should examine their current pay practices and policies to evaluate if changes need to be made due to the minimum wage increase. The new law not only affects the base salaries of employees but will also affect overtime pay, meal and lodging credits, and exempt/nonexempt classifications. For example, the increase in the minimum wage impacts whether employees qualify for overtime exemptions for executive, administrative or professional employees (i.e. teachers or department heads). One requirement of the overtime exemption is that an employee receives a salary that is not less than two times the California minimum wage for full-time employment of 40 hours per week. Therefore, effective July 1, 2014, the minimum salary to qualify for an overtime exemption is $3,120 per month, or $37,440 annually.
Violations of the minimum wage law carry serious penalties for employers. Labor Code section 1199 provides that an employer that violates a minimum wage law order is guilty of a misdemeanor, which is punishable by a fine of at least $100 or by imprisonment for 30 days, or by both. The employer could also be exposed to additional civil penalties. For example, nonexempt employees who are paid less than the minimum wage can file a wage claim with the Labor Commissioner's Office or can file a civil lawsuit to collect the difference between what they were paid and what they should have been paid at the new minimum wage.
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