2024 Minimum Wage Increases & Exempt Salaries
CEA - California Employers Association
Supporting employers since 1937.
By Giuliana Gabriel , J.D, HR Compliance Director
Your hourly workers just got an increase, but what about your salaried managers?
The minimum wage for non-exempt employees increased to $16.00 per hour for all employers, regardless of size, starting January 1, 2024. When employers are paying overtime at time and a half, this results in $24.00 per hour.
This minimum wage increase also impacts white-collar salaried employees. Exempt employees (administrative, executive, and professional) must earn at least two times the State’s minimum wage (times 2080 hours/year). Therefore the minimum amount a salaried employee is required to earn in 2024 is $66,560 annually.
To be properly classified as “exempt,” employees must satisfy both a duties test and the minimum salary requirement. CEA members can access our Exempt Analysis Worksheets for guidance on properly classifying employees, on our HR Forms page .
A few outlying professions require an even larger salary base, such as:??
Computer Professionals
For those who are properly classified as exempt “computer professionals,” the minimum salary amounts are increasing for 2024 as follows:
Physicians/Surgeons
For those properly classified as an exempt “licensed physician or surgeon,” the minimum salary amount is increasing for 2024 as follows:
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What About Fast Food Workers & Healthcare Workers??
Fast food workers at limited-service restaurants that are part of chains with over 60 locations nationally, will see an increase of $20 per hour as of April 1, 2024. Even establishments that are not covered by the new law can expect this to impact the labor market as a whole and workers’ expectations of minimum pay.
Healthcare workers are also supposed see a huge shift on?June 1, 2024?in how minimum wages are determined. The new law provides for a comprehensive minimum wage scheme for covered health care employees with minimum wage ranges depending on the type of facility, initially from $18 per hour to $23 per hour. However, the Governor recently requested for this law to be delayed and/or amended, so stay tuned!
Some Cities Have Even Higher Minimum Wages
Depending on your city or county, some local minimum wages increase every year on January 1 and/or July 1. CEA members can access all current local minimum wage requirements with ease by utilizing our Local Minimum Wage Fact Sheet on our HR Forms page .
Many jurisdictions in California have enacted their own minimum wage ordinances requiring employers to pay higher minimum wages for work performed within their geographical boundaries. Some ordinances require a minimum amount of hours (e.g., 2 hours per week) before this rule will apply. Remember to check local minimum wages where you have remote (hourly) non-exempt workers, and when you send workers to various job sites in different cities or counties.
Handling Changes With Empathy
What if this last round of increases means you can no longer afford to have salaried employees? If you are considering reclassifying employees from exempt to non-exempt, it can be challenging. Many employees often feel as though they are being demoted. Exempt employees exercise discretion and independent judgment not only in how they perform their work, but when they perform their work. They are not used to clocking in and clocking out, or remembering to take their breaks or lunch at a specific time. Handle this transition with empathy. It’s often recommended to have employees “practice” for a couple of pay periods while they are still paid a salary to adjust to tracking time and taking breaks. We have a number of other employee relations tips for you in our Exempt to Non-Exempt Fact Sheet .
At CEA, we are experienced in getting creative and uncovering HR solutions for your business. CEA members can call us on our HR support line for additional guidance, at 800.399.5331.