On April 4, 2016, Governor Brown signed Senate Bill 3 into law. The new law will gradually increase the state’s minimum wage to $15.00 per hour by 2022 for employers with at least 26 employees. Employers with 25 employees or fewer have an additional year to comply with each wage increase. The new law also modifies the Healthy Workplaces, Healthy Families Act of 2014, California’s paid sick-leave statute, by broadening its application to now include providers of in-home supportive services.

Wage Increase Schedule

Under the recently passed law, the current minimum wage is expected to increase according to the following schedule every January 1:
The new law requires the Director of Finance to annually determine, based on certain factors, whether economic conditions support a scheduled minimum wage increase and certify that determination to the Governor and Legislature.

Review Effect On Certain Exempt Classifications

The increase in minimum wage also impacts the requirements for exempt employee classifications. For example, to qualify as an exempt employee, the employee, among other factors, must earn a minimum monthly salary of no less than two times the state minimum wage for full-time employment. As a result, by 2022 a minimum wage increase to $15.00 means that affected employees will need to earn an annual salary of at least $62,400 to be exempt.

Paid Sick Leave For Providers of In-Home Supportive Services

Lastly, the law amends the scope of California’s paid sick-leave law to include providers of in-home supportive services. Providers of in-home supportive services assist eligible aged, blind and disabled individuals who are unable to remain safely in their own homes without this assistance. Specifically, beginning July 1, 2018, employers must grant at least one day of paid sick leave to providers of in-home supportive services who work in California for 30 or more days within a year from the commencement of employment. Employers will be required to provide two days when the minimum wage reaches $13 per hour, and ultimately three days when the minimum wage reaches $15 per hour.

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If you have any questions about this new law, or any other question about your company’s employment policies, please contact your SFSSW attorney. If you do not presently have an attorney with the firm, please contact Millicent Sanchez, Janet Swerdlow, or David Wimmer.

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