The start of the new year ushers in several pertinent changes to labor and employment law.  Employers should evaluate workplace policies and practices now to ensure compliance with these updates in 2016.

California Minimum Wage Increase
In 2013, California implemented legislation to incrementally increase the state minimum wage.  As a result, the minimum wage will increase from $9.00 per hour to $10.00 per hour, effective January 1, 2016. California employers are required to provide all non-exempt employees with an updated Wage and Employment Notice within seven calendar days if any information changes from the original notice provided.  For this reason, any employee who receives a change in their pay rate (including overtime rates) due to the increased minimum wage should be provided with an updated notice.

Not only does this increase affect the wages of non-exempt employees, it also affects the salaries of exempt employees. Effective January 1, 2016, the minimum salary requirement for an employee to meet the Administrative, Executive, or Professional Exemption will increase to $3,466.67 per month ($41,600 annually).  Commissioned inside sales employees under Wage Orders 4 and 7 may be eligible for overtime exemption if the employee earns more than 1.5 times the minimum wage each workweek, and more than half of the employee’s compensation is earned through commission. Employers need to ensure that employees classified as exempt meet these heightened salary requirements.

Other employment practices that may be affected by the minimum wage increase:

  • Meals & lodging
  • Employee draws against commission
  • Subminimum wage
  • Piece-rate employees

Local Enforcement
AB 970 expands the authority of the California Labor Commissioner to enforce local overtime and minimum wage laws. Many California cities have their own posting requirements for local minimum wage notices. This new law allows the Labor Commissioner to investigate and issue citations for violations of local ordinances, unless the employer has already been cited by a local government entity.

Workers’ Compensation
The Division of Workers’ Compensation finalized regulations that amend the Claim Form and the Notice of Potential Eligibility, as well as the Workers’ Compensation Notice to Employees – a required California posting.  Amended Forms and Notices can be found here.

Labor Law Poster Update
Changes in Federal and State laws require an update to your workplace labor law posters. Updated posters should be displayed in an area frequented by employees on a regular basis either on or after the date of the effective change(s).