In 2018, 21 states, including California, have minimum wage increases. Wage and hour requirements are one of the most litigated areas of employment law, so it is important for employers to comply with federal and state minimum wage regulations. The hourly minimum wage increases not only affect hourly non-exempt employees, but also the minimum salary threshold for exempt employees.
The minimum pay for salaried exempt employees is the annualized equivalent of double the state's hourly minimum wage. To calculate the minimum exempt salary, you multiply the doubled minimum hourly wage by 2080, which is the number of work hours in a year. This salary is one of the tests that allow you to classify an employee as exempt from wage and hour laws pertaining to overtime, meal and rest periods.
Not only must you keep track of increases to the minimum wage at the state and federal level, you must also pay attention to city rules. Many cities have enacted minimum wage ordinances, which must be followed if the pay rate is higher than the state minimum wage. The minimum wage may also vary by industry, such as for hotel or fast food workers.
In recent years, California has increased the minimum wage twice per year (January and July) and has implemented a tiered minimum salary system based on the number of employees a company has. This practice has become a trend and other states and city ordinances have followed suit.
A full list of the 21 states and their 2018 new minimum wage can be found here:
