MINIMUM WAGE INCREASE REMINDER – JANUARY 1, 2021
December 9, 2020
CALIFORNIA MINIMUM WAGE RATES
|Effective Date||Employers With 26 or More Employees||Employers With 25 or Fewer Employees|
Employers are also reminded that if the city or county in which your business operates has its own local minimum wage, then the local rate would apply (unless it is lower than the state’s minimum wage).
Employers should review non-exempt employee wages and make appropriate adjustments to ensure compliance for 2021.
EXEMPT EMPLOYEE THRESHOLD SALARY INCREASE
When California minimum wage increases, there is a corresponding increase that must occur with the threshold salary level for exempt employees to maintain their exempt status under the executive, administrative, and professional exemptions.
In California, for an exempt employee to maintain their exempt status they must meet not only the “duties test”, but also the “salary test”. Exempt employees must receive a salary of at least twice the state’s minimum wage for a 40-hour workweek. The salary must be a fixed amount recurring each pay period without change due to hours, quantity, or quality of work performed.
For 2021, this means exempt employees must receive a minimum annual salary of:
Employers With 26 or More Employees
Employers With 25 or Fewer Employees
COMPUTER EXEMPTION INCREASE
California also provides that certain employees working with computer software may be exempt from overtime compensation if they receive a minimum level of compensation. The rate of compensation has been increased and to be exempt from overtime requirements, they workers must be compensated no less than:
|Hourly Rate||Monthly||Annual Salary|
REIMBURSEMENT OF BUSINESS EXPENSE REMINDER
Now that many employees are being required to resume their remote work arrangements due to the recent renewal of the California Stay At Home Order, employers are reminded that California Labor Code Section 2802 requires an employer to provide reimbursement for certain expenses incurred by the employee as a direct result of working from home. The expenses to be reimbursed are those that are incurred at the direction of the employer when the employee is required to work remotely. When an employee chooses to work remotely the expenses are voluntarily incurred and need not be reimbursed.
The types of expenses that should be reimbursed include not only basic office supplies, paper, toner for the printer, etc., but an employer may also be required to provide or pay for a computer, printer or monitor that is suitable for work, if the employee does not already have appropriate technology devices at home. In addition, an employer is required to provide expense reimbursement even if the employee would have incurred the expense absent having to work from home – such as for monthly cell phone or data charges for internet service or costs for a landline. An employer is not required to reimburse expenses that are chosen for the convenience of the employee — such as faster-speed internet, additional monitors, an ergonomic chair, or desk.
As to the amount to reimburse, an employer is not required to pay the entire amount. The reimbursement should be “some reasonable percentage” attributable to the use of equipment or data for work is required. If an employee asserts that the amount of the reimbursement is not sufficient to cover the reasonable costs incurred, employees can present evidence to establish that the should be provided a greater reimbursement to cover the expenses they are being required to incur and the additional expenses should be considered by the employer.
This Newsletter is intended as a brief summary of employment law. While every effort has been made to ensure the accuracy of the information contained herein, it is not intended to serve as “legal advice,” or to establish an attorney-client relationship. If additional information is needed on any of the topics contained herein, please contact our office. All rights reserved. ©2020.