July 1 minimum wage increases
As of July 1, the minimum wage has increased in the following jurisdictions, regardless of the number of workers employed by the employer:
- Alameda $15.00
- Berkeley $15.00
- Emeryville $15.00
- Milpitas $15.00
- San Francisco $15.00
- San Leandro $15.00
- Freemont $13.50 $15.00
- Los Angeles $14.25 $15.00
- Mailbu $14.25 $15.00
- Pasadena $14.25 $15.00
- Santa Monica $14.25 $15.00
- Santa Rosa $14.00 $15.00
Overtime, accrued vacation, tipped employees, workers who make barely more than the minimum
Many California prevailing wage laws, including overtime rules are pegged to the workers “regular rate of pay,” rather than the minimum wage, per se. This means that overtime pay for minimum wage workers in the cities and counties that require a July 1 increase should be calculated under the new, mandated rate, even if the worker did not receive that rate because of employer error. Workers should check their pay stubs very carefully, especially in the first few months of the new rules.
Workers whose employment terminates must also be paid for any earned, accrued and unused vacation time in their final paycheck. If the accrual is attributable to work performed after June 30, vacation must be paid at the new required rate. As above, the calculation may get a little tricky and employers will make mistakes, so check your pay stubs.
Workers who make a substantial portion of their pay through tips should remember that they must be paid the same minimum wage as other California employees. For example, an employer may not count a waitperson’s tip income toward its obligation to pay the minimum wage.
Workers who make more than minimum wage, but just barely, may now have some small negotiating leverage with well-intentioned bosses. If the plan was to pay you more than the minimum wage, and you are now at the minimum, it feels like a pay cut. Consider whether it would be appropriate to ask for a raise.
Minimum wage rates impact low-paid managers and inside salespeople
Exempt executive, administrative and professional employees must, among other requirements, earn a salary of no less than two times the state minimum wage for full-time employment. Otherwise, that worker must able to collect overtime.
To determine whether a low-paid manger, for example, is really a manager and not just an underpaid wage worker, he or she must earn an annual salary of at least the minimum x 2 x 2080 hours.
Accordingly, effective July 1, 2020, the minimum salary threshold for a San Francisco worker to be classified as an exempt manager is $62, 400 ($15 x 2 x 2080 hours).
Commissioned inside salespeople are also affected by the minimum wage increase. Under California law, commissioned inside salespeople are exempt from the state’s overtime protections only if they meet two requirements:
- the employee earns more than 1.5 times the minimum wage; and
- more than half of that worker’s compensation comes from commission earnings.
What can you do if your employer fails to pay minimum wage?
If your employer fails to pay you the applicable minimum wage, you may file a lawsuit. This may be a situation where a class-action minimum wage lawsuit can make sense, even for lower-paid workers.
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Finally, it is important to note that it is unlawful for your employer to retaliate against you for filing a lawsuit over failure to pay the minimum wage.