California Department of Industrial Relations Publishes Two FAQs on Minimum Wage

Recently, the California Department of Industrial Relations (“DIR”) published two FAQs addressing minimum wage increases under California law to assist employers with the implementation of the new rates going into effect between 2017 and 2023.

As of January 1, 2017, the State minimum wage increased to $10.50 per hour for employers with 26 or more employees.  The State minimum wage remains at $10.00 per hour for employers with 25 or fewer employees. The minimum wage is scheduled to increase on January 1 each year until 2023 as follows:

Date Minimum Wage for Employers with 25 Employees or Less Minimum Wage for Employers with 26 Employees or More
January 1, 2017 $10.00/hour $10.50/hour
January 1, 2018 $10.50/hour $11.00/hour
January 1, 2019 $11.00/hour $12.00/hour
January 1, 2020 $12.00/hour $13.00/hour
January 1, 2021 $13.00/hour $14.00/hour
January 1, 2022 $14.00/hour $15.00/hour
January 1, 2023 $15.00/hour

The two FAQs cover basic questions regarding the minimum wage law.  One FAQ is geared toward employees.  The other FAQ is geared toward employers and provides more detail regarding the phase in of minimum wage increases.

New Minimum Wage Phase in Requirement 2017-2023 SB 3 - Frequently Asked Questions

This page is geared towards employers, and includes answers to questions regarding how DIR interprets the law with regard to franchises, joint employers, or parent-subsidy scenarios.

The web page also provides a roadmap as to how the DIR will count the number of employees for purposes of compliance with the law.  The DIR suggests employee count will be determined on a pay period basis, that employees will be counted regardless of whether they are exempt, non-exempt, full-time, or part-time and regardless of geographical location.

The DIR also suggests that an employer that obtains workers through a staffing agency should aggregate and count such workers, along with direct hire workers, as employees for purposes of determining the applicable minimum wage rate.

These FAQs, however, are not binding on California courts, and we are not aware of any court decisions that have analyzed these questions under the new minimum wage law.

Minimum Wage

This page is geared towards employees, and explains the difference between local, state and federal minimum wages, among other topics.

Although the federal minimum wage is $7.25, California’s minimum wage is higher and controls the California workplace unless there is a higher minimum stated by other law or contract.  Unionized employees may have a higher minimum wage under an applicable collective bargaining agreement.  Employees working in some California cities and counties may be entitled to higher rates based upon local ordinances.

Employers with further questions regarding federal, state, or local minimum wage issues may consult with one of the authors or with their usual employment and labor counsel at AALRR.

Categories: Wage & Hour

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