California has increased the minimum wage for all employers to $16 per hour, up from $15.50 a year ago. This change applies to nonexempt workers but also affects exempt workers since their salaries must be 1.5 times or twice the mandated minimum wage.
Fast food and health care workers
Fast food and health care workers will also see higher wages. Fast-food workers will get about $20 per hour, while the rates for health care workers will depend on the type and size of their facility. For example, for facilities with at least 10,000 full-time employees, the minimum wage will rise to $23 per hour and increase by $1 per hour annually after that.
Additionally, 30 cities and counties in California have also implemented their own minimum wage increases, which may be higher than the state minimum wage. This could pose its own problems, especially for companies with locations in different cities and counties across California.
Legal compliance and payroll adjustments
Because of these changes, your business needs to update its payroll systems to reflect the new wage rates. Your company must ensure nonexempt and exempt employees receive compensation according to the latest standard. Failure to comply may result in penalties and legal disputes.
Keeping up with the legal changes
While it may seem routine, failing to comply with minimum wage changes can prove costly. Taking proactive action on payroll and employment contracts can mitigate the risks of lawsuits and regulatory penalties. Consulting with legal professionals to help you update your company’s employment contracts and other legal processes related to this wage increase can help you avoid future headaches.