What Salary Increases Should California Employees Expect In January 2019?

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Denis ZilberbergDecember 22, 2018Wage & Hour Law

“Salary increase.” Any employee loves to hear these two words. And you may be surprised to learn that exempt employees are about to see their paychecks get bigger starting from January 2019.

“Wait, how did I miss that?” you may be wondering. If this news caught you off guard, do not worry. You are not the only one who had no idea that their salary could be increased starting next year.

Although Californians are no strangers to seeing the minimum wage in the state go up from time to time, the salary increases in 2019 will also affect exempt employees in Los Angeles and all across California.

Do you qualify for a salary increase as an exempt employee?

We invited our Los Angeles wage and hour issues attorney from The Kaufman Law Firm to explain who qualifies for the salary increase starting from 2019. The minimum wage bump to $12 per hour will affect exempt employees in California.

In case you are wondering, an exempt employee is an employee who:

  1. Is primarily engaged in the duties that meet the test of the exemption and
  2. Earns a monthly salary equivalent to no less than two times the minimum wage for full-time employment in California

Our wage and hour issues attorney Los Angeles explains that in order to qualify as an exempt employee, you must pass the two-part test comprising of:

  • The salary basis test and
  • The duties test

I know what you are thinking right now. “Okay, I still have no clue whether or not I qualify for the salary increase in California on January 1, 2019.” I can read your mind.

How will the salary increase affect the white-collar exemption?

Starting next month, the salary required to meet the “white collar” exemption in California will get a bump. Starting from January 1, 2019, the minimum wage in California will go up from $11 to $12 per hour for companies with 26 or more employees.

For employers with 25 or fewer employees, on the other hand, there will be a minimum hourly wage increase from $10.50 to $11 per hour. However, in addition to the increase in the minimum wage in California, the minimum salary for the “white collar” exemption will get a corresponding increase.

In order to meet the requirements of the “white collar” exemption after the salary increase, you will have to have a salary of at least $49,920 if you work for an employer with 26 or more employees or a salary of at least $45,760 if you work for an employer with 25 or fewer employees.

Do keep in mind, however, that California law has a very specific definition of the term “salary.” In order for your “salary” to qualify as a salary, you must demonstrate evidence that you are earning a predetermined amount that is not subject to reduction based upon the quantity or quality of work.

In other words, any bonuses, commissions, or other payments made by your employer to you throughout the year are not included in the calculation of your salary. If your employer fails to comply with the minimum wage requirements starting from January 1, 2019, you may be able to sue him or her for wage and hour violations.

Speak to our Los Angeles wage and hour issues attorney from The Kaufman Law Firm to determine whether or not your salary qualifies as exempt. Get a consultation by calling at 310-981-3404.



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