(Source: CDF Labor Law by Nancy N. (“Niki”) Lubrano and Brian E. Cole II – January 2, 2024)
As we enter the new year, many of us are reviewing what we have done in the past and resolving to make improvements. California employers should utilize similar processes to ensure continued compliance with California’s ever-evolving wage and hour laws and best practices. However, unlike many of those gym memberships that often start gathering dust by mid-February, the following list of five wage and hour tips need to be resolutions that actually stick for California employers to ensure compliance in 2024:
1. California Minimum Wage Increases
- Starting January 1, 2024, the California Minimum Wage increased from $15.50 to $16.00 per hour.
- Local ordinances may require a higher minimum wage. Here is a link to a list of city and county minimum wages in California maintained by UC Berkeley.
- Certain industries have additional requirements for 2024. The minimum wage is increasing for specific fast food employees to $20.00 per hour effective April 1, 2024 (AB 1228). The range of minimum wages for health care workers, depending on the type of facility, will also increase starting June 1, 2024 (SB 525).
2. Salary Exemption Test Increases
- With the increase in California’s minimum wage, the salary exempt test rised from $64,480 to $66,560 (2x minimum wage) for 2024, which is one-prong to ensure the Administrative, Executive and Professional Exemptions are being properly applied.
- The Collective Bargaining Exemption minimum of 1.3x the minimum wage for exemptions — that unionized employers might be able to utilize via collective bargaining — rised from $20.15 to $20.80 per hour to qualify.
3. Paid Sick Leave Expansion
- Paid Sick Leave increased from three days (or 24 hours) to five days (or 40 hours) (SB 616). Use can be limited to 40 hours or five days per year.
- Needs to be accrued at 40 hours (or 5 days) by the employee’s 200th day of employment or can be front-loaded to avoid accrual and carryover limitations.
- Paid Sick Leave carries over to the following year of employment, and the accrual cap increases from 48 hours (or 6 days) to 80 hours (or 10 days).
4. Reimbursement of Business Expenses Review
- Existing Labor Code § 2802(a) requires that an employer shall indemnify (or reimburse) his or her employee for all necessary expenditures, or losses incurred by the employee in direct consequence of the discharge of his or her duties.
- Following the Thai v. IBM decision, employers who have implemented voluntary work-from-home agreements, that shift some expenses associated with such work to the employee, should carefully consider the risks associated with those agreements.
- Employers would also be well served to carefully consider how to reimburse employees for work-from-home arrangements, and the potential risks associated with the same, in light of Thai.
5. Wage Statements, Employee Handbooks, and Training
- With the above changes to California’s wage and hour laws and possible expansion of existing requirements based on recent case law, it is imperative for California employers to ensure that such changes are properly reflected on the employees’ wage statements to avoid direct or derivative liability, pursuant to the requirements of Labor Code §226.
- Further, such changes may necessitate updated policies and/or Employee Handbooks to ensure continued and up-to-date compliance.
- Like any change in company policy, proper and consistent application of those new policies in practice is just as important. Updating your training may prove beneficial to ensure California Employers are in compliance both on paper and in practice.
For help navigating the often complex and ever-changing wage and hour laws, contact our human resource experts here at CalWorkSafety & HR. Our team is experienced in all aspects of California workplace regulations, and we can help ensure your business remains complaint. Contact us at https://www.calworksafety.com/contact-us or call (949) 413-6821.