2022 is off to a fast start, and already there are changes to employment law within the Golden State. Learn what’s changed for California’s minimum wage laws that employers must follow, and who is impacted.
In-State and Out-of-State Employers
Regardless of the employers’ location, if they have an employee who resides in California, the new wage laws are applicable.
Wages Increase beginning January 1 of 2022
The federal minimum wage is $7.25 per hour, which has not changed since 2009. California joins many other states in raising the state minimum wage above the federal mandate of $7.25 per hour.
In California, the increase changes based on the number of employees a company has.
Small Companies with fewer than 25 employees will now have a base minimum wage of $14.00. Companies with more than 25 employees will have a base minimum wage of $15.00. The one-dollar difference disappears in 2023 as all employers will have a base minimum wage of $15.00 per hour.
While that process seems simple, keep in mind that city and other employment laws can create situations where higher minimum wages occur.
Salaried Loophole – Closed
Some rules define what a salaried employee makes per hour. Generally, that is twice the applicable minimum wage divided by 2080 (full time.)
Again, it seems straightforward that a company with 26 employees would have a base salaried wage level of $30 per hour. However, how the base salaried wage calculation occurs depends on which employment laws define minimum wage. For example, if a city worker falls under a higher minimum wage due to city minimum wage ordinances, then the minimum wage for salaried personnel also rises.
While the new wage laws are favorable for California employees, they can confuse California employers and employees. So, as the new year begins, now is the time to find clarifying answers to your employment questions.
Whether you are an employee who feels they are not paid correctly, or an employer who wants to be certain that they are paying their employees honestly and correctly, help is available.
Employees are encouraged to bring pay discrepancies to their employer, the State, or legal counsel.
What You Can Do
For more information about how the new California wage laws impact you, or if you feel you are underpaid, give our team at Davtyan Law Firm a call. We work with wage and employment law and help resolve discrepancies in pay.