Last March, the California Legislature approved a plan to raise the state’s minimum wage to $15 per hour by January 1, 2022. The move made the state the first in the country to significantly boost its pay and encouraged others to follow suit.
Under the deal, crafted by lawmakers and labor leaders, California’s $10 minimum wage will rise to $10.50 in 2017, $11 in 2018 and a dollar each year through 2022. The changes affect employers with 26 or more employees. This increase will be delayed one year for employers employing 25 or fewer workers, from January 1, 2018, to January 1, 2023.
The idea behind the wage increases was to help out the state’s workforce and give businesses time to plan for the change. If a company in California hasn’t increased its minimum wage by 50 cents yet this year – they are in violation of the new law. It took effect Jan. 1.
What does all this mean for employers, especially small businesses? A lot, potentially. Businesses must comply with the new rules or face legal action or civil penalties. An employer who fails to comply with the terms of the law is subject to, for example, a $1,000 fine for each violation. Additionally, a worker who doesn’t receive the minimum wage increase is entitled to back pay and reimbursement of attorney’s fees and other expenses. They can also recovery liquidated damages of 100% of the unpaid wages.
There are some employees who are exempt from the minimum wage law, such as outside salespersons, individuals who are the parent, spouse, or child of the employer, and apprentices regularly indentured under the State Division of Apprenticeship Standards.
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