Minimum Wage Changes – Are You Ready?

By VICKY BROWN

Updated December 23, 2019

The minimum wage is changing, are you ready?

Year-end is upon us, and that means that 2020 is ever closer.  New year, new minimum wage.

The state of California, among numerous states, cities and counties, will raise their minimum wage rate in January.

A quick overview follows:

LocationIf you have 25 or fewer employeesIf you have 26 or more employees
California state$12.00$13.00
Los Angeles city (no change)$13.25$14.25
Los Angeles county (no change)$13.25$14.25
Malibu city (no change)$13.25$14.25
Pasadena (no change)$13.25$14.25
San Diego$13.00$13.00
San Francisco (no change)$15.59$15.59
Santa Monica (no change)$13.25$14.25
Palo Alto$15.40$15.40
   
New York state$11.80$11.80
New York city$15.00$15.00
Nassau, Suffolk, and Westchester Counties$13.00$13.00
New Jersey state$11.00$11.00

A hike in minimum wage doesn’t only impact companies with minimum wage employees. The new rate may impact what you pay your exempt level employees as well.

California employees who are exempt from overtime, are required to be paid no less than twice the weekly minimum wage amount. So, if the state minimum wage for your company is $12.00 per hour; you must pay exempt employees no less than $960 per week ($12 x 80 = $960).

A hike in minimum wage doesn’t only impact companies with minimum wage employees. The new rate may impact what you pay your exempt level employees as well.

How to Prepare for Minimum Wage Increases

Your company should take some steps to ensure that increasing the employee wages won’t damage the financial health of the company overall. For smaller companies, the extra requirements can be taxing. Here are a few things to consider when planning for the immediate and long-term future:

  • Knowledge is Key. It’s important for you to stay up-to-date on changes in your area. This includes current and future minimum wage requirements, as well as any new laws and regulations pertinent to your employees. It’s a good idea to review new regulations with an HR professional, or counsel, to make sure that your practice and process meets state and federal standards.
  • Conduct an Internal Audit. It’s important that you know how these increased payroll expenses

The preceding is provided for general informational purposes only, and not intended to constitute legal advice.

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