For businesses with more than 25 employees, the state’s minimum wage will increase from $10.00/hour to $10.50/hour starting on January 1, 2017.
[Note: Employers in San Francisco and Oakland (and many other municipalities), however, this new state minimum wage is still lower than the local minimum wage required by municipal law. For example, the San Francisco minimum wage for all for-profit employers will be $13.64/hour. The new Oakland minimum wage will be $12.86/hour. If you want to see if your municipality has a higher minimum wage than what is required under state law, you can look up your municipality here.]
Also, given this increase in the state minimum wage, the minimum salary that will be required to qualify someone as “exempt” under the administrative, executive, or professional exemption will increase to $43,680/year. Any employee at a business with greater than 25 employees who is paid less than this salary cannot be classified as “exempt” starting on January 1, 2017.
For businesses with 25 employees or less, the state minimum wage will be $10.00/hour starting on January 1, 2017. The minimum salary required for exempt employees in these smaller companies will be $41,600/year.
[Note: The U.S. Department of Labor’s new overtime rules are set to take effect in a few weeks, on December 1, 2016. If they take effect, the new minimum salary test will be $47,476/year — not the California minimum numbers shown above. However, the U.S. Department of Labor’s new overtime rules are currently being challenged in federal court in Texas, and a ruling is expected soon. Stay tuned!]