As expected, Governor Schwarzenegger signed AB 1835 raising minimum wage to $7.50 effective January 1, 2007, and then to $8.00 effective January 1, 2008.
The new law effects not only minimum wage earners, but also exempt employees. To be exempt from the overtime laws under the Professional, Administrative or Executive exemptions, the employee must receive a monthly salary equivalent to two-times minimum wage. The salary is based on a 40-hour workweek.
Beginning January 1, 2007, Professional, Administrative or Executive employees must receive no less than $600.00 per week or $31,200.00 per year. Beginning January 1, 2008, they must receive no less than $640.00 per week or $33,280.00.
Individual and class-action lawsuits based on improper classifications result in millions of dollars in losses every year to business in California. Employers should review their position descriptions and payroll to ensure employees are properly classified.
Original article by Robert E. Nuddleman of Phillip J. Griego & Associates
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