Please note that any increases which are made to comply with the new federal overtime law may be subject to change under the new administration. If changes in the federal law occur, such as exempting small employers for example, California standards would again apply. The California benchmark for exempt employment is tied to the California hourly minimum wage.
For employers with 26+ employees (such as some of our larger churches), the California minimum wage goes to $10.50 on January 1, 2017. This would make the minimum salary benchmark for exempt employment $43,680.
For employers with 25 or fewer employees (such as many of our smaller churches), the minimum annual salary benchmark would be based on an hourly minimum of $10.00 per hour, and would stay at the 2016 level of $41,600 for 2017. Then, on 1/1/18, the 25 or fewer employers would need to go to the level based on the $10.50 hourly minimum, or $43,680.
As the California hourly minimum wage increases for the applicable employer size, the minimum level for exempt employment also increases.
The best option under all scenarios is to ensure that all positions are correctly classified. Where a position is classified as non-exempt, only the applicable minimum hourly rate would apply.
Please contact employment counsel for assistance in classifying employees, and Conference Human Resources with basic questions: (626) 568-7300.
Director of Human Resources