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Update on California Employment Law

As from January 1st, 2008 California now has the highest hourly rate of pay in the United States thanks to its employment law and the backing of it's Governor, Arnold Schwarzenegger. On that date a worker's minimum wage rose from $7.50 an hour to $8.00 and hour.

In addition, workers under California employment law provisions will also receive an increase in meal and lodging credits by the same percentage as the minimum wage increases. Be aware though, that under employers governed by California employment law, they can use the increased amounts for meals and lodging to count against minimum wage when they provide workers with meals/lodging.

These California employment law provisions do not apply to federal employees that work outside California. For those unfortunates the wage stays at $5.15 per hour.

The area of overtime under California employment law is somewhat problematical and is currently the subject of intense debate. The employment law in California separates workers into two classes - those who are non-exempt and those who are exempt.

Exempt employees could be eligible for a tax rebate on their overtime earnings whereas non-exempt employees would not qualify for this rebate.

On the plus side California employment law stipulates that when paying a non-exempt employee, that employee is subject to all the rules as set out by the Industrial Welfare Commission which means that he must be paid for all the overtime hours worked.

If you are an employer and are not sure into which category your workers fall, then check out the California employment law codes and regulations. Alternatively you can call the Department of Labor for advice.

Basically, the category under which an employee falls is based upon their level of responsibility or their professional status. Whether they are receive a wage or salary, or their job title does not have anything to do with it.

Examples of exempt employees under California employment law would include licensed professionals such as lawyers, engineers, doctors, certified public accountants and architects. Managerial staff who are responsible for training, hiring and firing and spend less than 50 percent of their time performing the same duties as their staff also qualify.

The other two categories considered to be exempt are outside sales reps and those who create/formulate business policies for their organizations. Again, if you have any questions about exempt versus non-exempt employees and how to make sure they are paid according to the law, check with the nearest Department of Labor office. Save yourself some time and grief in the long run.