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.