Hi, here’s your HR quickie.

With the new year, comes a new state minimum wage.  California, like a number of other states is increasing the minimum amount you can pay non exempt employees.  Now, by way of reminder, non exempt employees are eligible for overtime and are paid on an hourly rate.

Well, that hourly rate is going up – effective January 1st it will be $16 per hour for all employers.  Now, I know that in the prior years, as the state was ramping up to this level, there was a separate minimum wage for large and small employers.  But everything has ‘normed’ now, and the rate is the rate for everyone.

The extra little quirk with an increase in the state minimum wage is that it impacts the minimum amount you can pay exempt employees too.  In California, an exempt level employee has to be paid at least twice the minimum wage rate.  That means that in 2024, your exempt employees have to get at least $66,560 per year.  Otherwise they won’t meet the exempt threshold and are then considered non exempt, and eligible for overtime etc.

OK – another thing to keep in mind is that your particular city or county may have a minimum wage that is higher than the state – so be sure to check.

Alright – what should you do to get ready?

Well, first review the pay rates for everyone on your team.  If they will be below the minimum wage, well – Happy New Year to them because they’re getting an increase.

Next, review the pay rates of all your exempt employees to be sure they are clearing the pay rate threshold – and if they aren’t you’ll either have to increase their pay, or convert them to non exempt, hourly paid employees.

And finally, be sure you have posted the minimum wage with your other employment posters.