The California Labor Code requires an increase to the state minimum wage each year. Effective Jan. 1, 2019, the statewide minimum wage will increase from $11 to $12 per hour for employers with more than 25 employees. This also impacts other wage and hour obligations, such as the minimum salary requirement for exempt employees, which will increase to $49,920.
In addition to the statewide minimum wage, several cities and counties have adopted their own minimum wage requirements; more information is available on the University of California, Berkeley Labor Center website. In several areas, the minimum wage will increase beginning Jan. 1, 2019 — such as San Jose, where the minimum wage will increase from $13.50 to $15 per hour. In other areas the increase becomes effective July 1, 2019 — such as in the city and county of Los Angeles, where the minimum wage increases from $13.25 to $14.25 per hour. Like the statewide minimum wage, the rates may differ for small employers. Under California law, employers must comply with the highest applicable minimum wage.
Further, California Labor Code sections 515.5 and 515.6 provide overtime exemptions for certain computer professionals and licensed physicians. One aspect of the exemption requires a minimum rate of pay, which is subject to an annual adjustment by Department of Industrial Relations (DIR) when there is an increase in the Consumer Price Index. Effective Jan. 1, 2019, the licensed physician or surgeon minimum hourly rate of pay to qualify as exempt from overtime will increase from $79.39 to $82.72.
The computer software professional minimum hourly rate of pay will increase from $38.89 to $39.90 beginning Jan. 1, 2019. The minimum monthly salary will increase from $6,752.19 to $6,927.75, and the minimum annual salary will increase from $81,026.25 to $83,132.93.