Minimum Wage & Exempt Classification Changes Coming in 2020

As you are planning and budgeting for 2020, we want to remind you of the new hourly minimum wage along with minimum salaried exempt rates for both the State of California and the City of San Diego.

Effective January 1, the City of San Diego’s minimum wage will increase for all employers (regardless of size) to $13.00 per hour.  The rest of San Diego County follows the State of California minimum wages.    Other cities in the State may have their own City requirements as well.

The following are the California State minimum wages for 2020-2023:

Administrative, professional, and executive exemptions require workers to earn 2x the state minimum wage for full-time employment in order to be classified as exempt (plus a strict duties test). This means that the following are the California State minimum wages required for the salary portion of the test:

Additionally, the computer software employees’ minimum hourly rate of pay exemption increases to $46.55 per hour. The minimum monthly salary exemption increases to $8,080.71 and the minimum annual salary exemption increases to $96,968.33.

As stated above, California has a strict duties test that employees must meet before they can be classified as exempt from wage and hour laws (overtime, breaks, lunches), along with the salary test.  A PBO Advisory Group HR consultant can help you evaluate specific positions and associated duties to determine if your employees meet the salary exempt requirements.

For more information about PBO’s HR services or to schedule a training for your company, contact Laura Nieman, PHR at Laura@pboadvisory.com or 858.935.4844.

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