Ringing in the New Year for California Employers: 5 Wage and Hour Tips to Ensure Compliance in 2024
As the New Year approaches, many of us are reviewing what we have done in the past and resolving to make certain changes for 2024. As a California employer, the process should be similar to ensure continued compliance with California’s ever-evolving wage and hour laws and the best practices for the New Year. But, unlike those gym memberships that may start gathering dust in mid-February, the below list of 5 wage and hour tips need to be resolutions that actually stick for California employers to ensure compliance in 2024:
1. California Minimum Wage Increases
- Starting January 1, 2024, the California Minimum Wage increases from $15.50 to $16.00 per hour.
- Local ordinances may require a higher minimum wage. Here is a link Inventory of US City and County Minimum Wage Ordinances - UC Berkeley Labor Center to a list of City and County minimum wages in California maintained by UC Berkeley.
- Certain industries have additional requirements for 2024, with the Minimum Wage increasing for specific fast food employees to $20.00 per hour effective April 1, 2024 (AB 1228) and an increased range of Minimum Wages for health care workers depending on the type of facility effective June 1, 2024 (SB 525).
2. Salary Exemption Test Increases
- With the increase in California’s Minimum Wage, the salary exempt test rises from $64,480 to $66,560 (2x minimum wage) for 2024, which is one-prong to ensure the Administrative, Executive and Professional Exemptions are being properly applied.
- The Collective Bargaining Exemption minimum of 1.3x the minimum wage for exemptions that unionized employers might be able to utilize via collective bargaining rises from $20.15 to $20.80 per hour to qualify.
3. Paid Sick Leave Expands
- Paid Sick Leave increases from 3 days (or 24 hours) to 5 days (or 40 hours) (SB 616), which use can be limited to 40 hours or 5 days per year.
- Needs to be accrued at 40 hours (or 5 days) by the employee’s 200th day of employment or can be front-loaded to avoid accrual and carryover limitations.
- Paid Sick Leave carries over to the following year of employment and the accrual cap increases from 48 hours (or 6 days) to 80 hours (or 10 days).
4. Reimbursement of Business Expenses Review
- Existing Labor Code § 2802(a) requires that an employer shall indemnify (or reimburse) his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.
- Following the Thai v. IBM decision, previously discussed in our previous blog Update on Post-Pandemic Voluntary Work-From-Home Agreements & Reimbursements for Work-At-Home Expenses. Employers who have implemented voluntary work-from-home agreements that shift some expenses associated with such work to the employee should carefully consider the risks associated with those agreements.
- Employers would also be well served to carefully consider how to reimburse employees for work-from-home arrangements and the potential risks associated with the same, in light of Thai.
5. Wage Statements, Employee Handbooks and Training
- With the above changes to California’s wage and hour laws and possible expansion of existing requirements based on recent case law, it is imperative for California employers to ensure that such changes are properly reflected on the employees’ wage statements to avoid direct or derivative liability pursuant to the requirements of Labor Code §226.
- Further, such changes may necessitate updated policies and/or Employee Handbooks to ensure continued and up-to-date compliance.
- Like any change in company policy, proper and consistent application of those new policies in practice is just as important. Updated training in 2024 may prove beneficial to ensure California Employers are in compliance both on paper and in practice.
If you have any questions about this blog post or would like to schedule a wage and hour compliance check, please contact the authors of this article, Nancy “Niki” Lubrano or Brian Cole, or your favorite CDF attorney. Be sure to subscribe to CDF’s blog here to ensure you receive these regular monthly wage and hour law tips.