Minimum salary requirement reminders

Can you believe it is almost the end of the year? As you look ahead to 2023, minimum salary requirements should be on your radar, to ensure non-exempt employees are paid at or above minimum wage, and exempt employees are meeting the salary test requirements. 

Minimum wage increase

Starting January 1, 2023, all employers will have the same minimum wage threshold regardless of company size. All non-exempt employees must make $15.50 per hour or more. This is an increase for every employer in California. 

The increase to minimum wage will also trigger an increase to the minimum salary threshold for exempt employees. The majority of the duties tests require a minimum salary threshold of double the minimum wage. With the 2023 increase, the minimum salary threshold will be $64,480 as of January 1, 2023 for professional, executive, and administrative tests. Your consulting team can assist you with other duties tests (computer professional, sales) to ensure you are paying your employees the correct rate. 

Part time, exempt

We have received an influx of questions regarding part-time, exempt employees. This is acceptable under California law as long as your employee still meets the duties and salary test. Meaning, an employee may earn $75,000 per year (based on 40 hours per week) then decides to scale back to 20 hours per week. This is acceptable as long as the employee is earning at least $64,480 starting January 1, 2023. It is also important to remember that the employee must still meet the duties test. Reach out to your consulting team for guidance on this. 

Locality minimums 

There are several counties and cities that have a local minimum wage rate as listed below. We are available to assist you with ensuring your employees are paid properly when working in one of these areas.

It is also important to remember that local minimum wage rates only apply to non-exempt employees. These rates do not factor into the salary threshold for your exempt employees.

• Alameda

• Belmont

• Berkeley

• Burlingame

• Cupertino

• Daly City

• East Palo Alto

• El Cerrito

• Emeryville

• Fremont

• Half Moon Bay

• Hayward

• Los Altos

• Los Angeles City

• Los Angeles County

• Malibu

• Menlo Park

• Milpitas

• Mountain View

• Novato

• Oakland

• Palo Alto

• Pasadena

• Petaluma

• Redwood City

• Richmond

• San Diego

• San Francisco

• San Jose

• San Leandro

• San Mateo

• San Carlos

• Santa Clara

• Santa Monica

• Santa Rosa

• Sonoma

• South San Francisco

• Sunnyvale

2022 was a whirlwind and 2023 is starting with a bang! Join us for our annual legal update to hear about what you need to know as employer in California. No matter the size of your business, you’re likely to be impacted by at least one of the new laws. Presented by Alden Parker, Regional Managing Partner - Fisher Phillips. This event is complimentary for clients of HR Done Right, Benefits Done Right, and Fisher Phillips.