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California Employment Law – Taking it Higher


Did you know that thanks to California employment law and the backing of the current Governor, California will have the highest hourly rate of pay in the USA starting January 1, 2008? California employment law will then dictate that a worker's minimum wage will be $8.00 an hour, up from $7.50 an hour.

In addition, workers under California employment law provisions will also receive an increase in meal and lodging credits by the same percentage as the minimum wage increases. Be aware though, that under employers governed by California employment law, they can use the increased amounts for meals and lodging to count against minimum wage when they provide workers with meals/lodging. Unfortunately, if you are a federal employee and work outside California, your wage remains at $5.15/hour. That bites!

The hottest issue in California employment law is the payment of overtime. This is an area of California employment law that is pretty much akin to stepping on a landmine. Why? Because there are two classes of workers under California employment law – exempt and non-exempt – and failure to know the difference can cost business big bucks. If an employee entitled to overtime is treated as exempt, they could be eligible to a nice chunk of change for overtime pay once the dust settles.

Is there a difference when paying an exempt versus non-exempt worker? Under California employment law, a non-exempt worker is subject to all pay rules set up by the Industrial Welfare Commission – that includes overtime. In other words, a non-exempt employee must be paid all overtime hours worked.

If you are in doubt as to what category your workers fall into, check California employment law codes and regs for the answer. If it still isn't clear, then call the Department of Labor. In general to be an exempt employee it would depend on the level of responsibility they have, or their professional status. This doesn't have anything to do with their job title, or whether or not they get a salary or and hourly wage.

As a general rule of thumb, employees considered to be exempt under the law are licensed professionals.  E.g. doctors, lawyers, architects, engineers, and certified public accountants. Also exempt are managers who hire, fire, and train, and spend less than 50 percent of their time performing the same duties as their employees
The other two categories considered to be exempt are outside sales reps and those who create/formulate business policies for their organizations. Again, if you have any questions about exempt versus non-exempt employees and how to make sure they are paid according to the law, check with the nearest Department of Labor office. Save yourself some time and grief in the long run.

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