Taking place this year the minimum wage in California will increase to $15.50 state-wide, and a pay increase for exempt employees will begin, among other important changes—most of which are already in effect! This is a brief overview of what’s to come, and some thoughts on how to best prepare your business for it!

Statewide & Local Minimum Wage Increases

As of Jan. 1, all employers must provide their employees a minimum wage of at least $15.50 per hour. Be advised that in addition, several cities have individually raised their minimum wage. Notably, local to Los Angeles, West Hollywood raised its minimum wage to $17 per hour for employers with 1-49 employees and $17.50 per hour for employers with 50+ employees. Most of the increases are the maximum annual increases to take account of the national inflation rate. Please be sure to check if there are changes in your location. 

New Minimum Salary Requirements for Overtime Exempt Employees

Under administrative, executive, and professional exemptions, California employers must pay employees a monthly salary of at least twice the state’s minimum wage. In light of the new increases to the state minimum wage, the minimum annual salary for overtime-exempt employees will now increase to $64,480.

Under the commission pay exemption, employees must earn at least one and a half times the state minimum wage for all hours worked, with at least half of their compensation from commissions. These employees will have to earn at least $23.25 an hour in 2023. Also, the minimum pay for employees under the computer software professional exemption increases to $53.80 per hour, or $112,065.20 per year. This is something employers should review every year to make adjustments as necessary, as increases in minimum wage will also trigger salary increases. 

State Supplemental Leave for Covid - 19 has Expired

COVID-19 supplemental leave expired on Dec. 31, 2022. An employee using available supplemental paid sick leave on that date will be allowed to complete that absence and use available leave into the first days of 2023. Note that there may be some additional local supplemental leave ordinances still in effect. Please be sure to familiarize yourself with changing COVID-19 legislation that may apply to your business. 

Changes to Bereavement Leave 

Where California never previously required employers to provide bereavement leave, though many offer it, bereavement leave is now required for employers with five or more employees. Employers must provide five days for bereavement for a spouse, child, parent, sibling, grandparent, grandchild, state-registered domestic partner, and parent-in-law of the employee. The leave days need not be consecutive and can be intermittent. 

Paid Sick Leave for Non-Family Member “Designated Person”

As of Jan. 1, employees are able to use their California-paid sick leave to care for a “designated person.” The person does not need to have a blood or family relationship with the employee, and the employer can limit the employee to one designated person per 12-month period for sick days. Please note, the definition of “designated person”  differs slightly from the CFRA definition in that it does not require the designated person to be “the equivalent of a family relationship.” 

How Do I Keep Up with All of This?

Great question! Please note that this is only a brief overview of the changes. There are some nuances to each changing law that may also be important to you. I’ve said it before, but now is a good time to reiterate that it is vital for businesses to create a connection with an employment attorney. They can help you go over your policies on at least a yearly basis, and prevent you from making some potentially costly mistakes when taking matters into your own hands. Employment law is highly multifaceted, especially in California, so much so that even attorneys have to work hard and do research to keep up and have a working understanding of the changes. Having someone you can rely on for advice and regular review is a business lifesaver, and promotes smoother operations. Here’s to a productive and safe business plan for 2023!