Determining when an employee gets overtime — and when an employee can be considered “exempt” from overtime — is tricky business in California. Penalties can be extraordinarily severe for an employer who improperly classifies a worker as “exempt.” In general, under current California law, every employee who works over 8 hours in a day or… Read More
Posts Categorized In: Compensation and Benefits
California Raises Minimum Wage to $15/Hour
California Governor Jerry Brown announced that a deal had been reached with the California legislature to gradually raise the state’s minimum wage to $15 an hour by 2022. This would give California the highest state-wide minimum wage in the country. Under the new law, the state minimum wage will increase from the current $10 an… Read More
Governor Brown Signs SB 358, the “California Fair Pay Act”
Earlier today Governor Brown signed SB 358 known as the “California Fair Pay Act.” This new law, which takes effect on January 1, 2016, gives California the strongest equal pay law in the nation. SB 358 amends California Labor Code §1197.5 to “close the gaps” in the state’s existing equal pay law. Specifically, SB 358:… Read More
401k Options for Small Businesses are Improving
Only 14% of employers with fewer than 100 employees offer a 401k plan. That’s because 401k plans generally are expensive and require considerable paperwork and other maintenance. That’s especially true for smaller 401k plans — because they hold fewer assets, they generate less trading fees and have less negotiating power, which results in higher set-up,… Read More
Los Angeles Raises Its Minimum Wage to $15/Hour
On Saturday, June 13, 2015, Los Angeles Mayor Eric Garcetti signed into law a measure that would gradually increase the city’s minimum wage to $15/hour. Under this new law, in July 2016 the minimum wage in Los Angeles will increase to $10.50. Each year thereafter, the minimum wage in Los Angeles will further increase to… Read More
SF and Oakland Pass Laws Raising the Minimum Wage
The California statewide minimum wage is currently $9.00 per hour. It will increase to $10.00 per hour on January 1, 2016 as a result of the passage of AB 10, which I blogged about here. But local jurisdictions are always free to set higher minimum wages, and that is exactly what voters in both Oakland… Read More
I.R.S. Bars Employers From Dumping Employees into Health Exchanges
The Affordable Care Act requires employers with 50 or more employees to provide health coverage for their employees or face stiff fines. To comply with the new law, many employers were canceling their group health plans, dumping their employees into the health exchange (which is Covered California in this state), then reimbursing those employees for… Read More
U.S. Supreme Court Rules FICA Tax Applies to Severance Pay
On March 25, 2014, the U.S. Supreme Court ruled 8-0 in United States v. Quality Stores, Inc. that severance payments made to involuntarily terminated employees are taxable “wages” subject to FICA taxes. This decision resolved a split among lower federal courts which left some employers uncertain whether to withhold and pay FICA taxes on severance… Read More
New IRS Tip Rule Says Mandatory “Service Charges” are Wages
If you are a restaurant that charges a mandatory 18% service charge on large parties…or if you charge a mandatory $15 corkage fee for opening a customer’s bottle of wine…or a $3 per slice fee for cutting a customer’s birthday cake…you may want to reconsider this practice. Why? Because starting on January 1, 2014, IRS… Read More
The Affordable Care Act is Good for Small Business
In the October 14, 2013 edition of The New Yorker, author James Surowiecki argues that the Affordable Care Act, which is often referred to as “Obamacare,” will have “enormous” benefits for entrepreneurs and small businesses. You can find the article here. One benefit, according to Mr. Surowiecki, is that employees will no longer face “job… Read More