Raise Them Up

“I know the new minimum wage goes into effect on January 1st but does it change anything else?”

Your HR Survival TipHR Jungle

California’s minimum wage sees another increase on January 1st in 2019 and 2020 and 2021, etc. However, that’s just the state minimum wage. Many of you may be subject to local laws that are higher or on a different schedule than the state law. San Diego, for example, will increase to $12.00 for anyone working within San Diego city limits.

The new minimum wage in California will be $11.00 (if you have no more than 25 employees) or $12.00 (if you have 26+ employees). Companies with no more than 25 employees will continue to be $1.00 behind larger companies until 2025 when all sizes will be paying $15.00/hour.

One thing the state law affects (and the local laws don’t) is the minimum salary you’re allowed to pay and have someone eligible as salaried exempt. Only the state law applies and it is a calculation based on the state minimum wage of [2 X state minimum wage X 2080]. No matter how few or how many hours your salaried exempt person works, they must be making at least $45,760 (if you have no more than 25 employees) or $49,920 (if you have 26+ employees). If you’re not paying that amount, they will be considered hourly employees.

Do your employees use their own hand tools on the job? You must either provide the tools needed in their trade or you must pay those employees twice the minimum wage.

Any employees with wage garnishments? Pull the documents and recalculate the amount they must pay each pay period because they are now making more money than before.

Watch your payroll calculations if your payroll period includes time in December and January to ensure you’re paying at least the new minimum wage for those January hours.

When you’re feeling a little less squeezed by this new minimum wage, stop and take a look at those employees who were making a little more. Recognize they will no longer be as happy with their wages because they just became closer to being minimum wage workers. They won’t think about the fact that state law caused that 5-8% increase. All they’ll think about is the 2-3% increase they got, if they even got that. Also pay attention to those leads and supervisors because the people reporting to them just got a little closer to those wages.

A new minimum wage has a ripple effect felt throughout the organization. Although few companies can afford to provide company-wide increases, be prepared for the fallout. Just blaming state law won’t make anyone feel better… except those minimum wage earners.

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