Wage Law

Effective January 1, 2007, the minimum wage increases from $6.75 to $7.50 per hour under Assembly bill 1835 (Lieber), approved by Governor Arnold Schwarzenegger on September 12, 2006. Under the same bill, the minimum wage will increase to $8.00 per hour on January 1, 2008.

The increased minimum wage increases the minimum salary that must be paid to exempt executive, administrative and professional employees, who must be paid no less than twice the minimum wage if they are to be denied overtime pay for work in excess of eight hours per day or forty hours per week. Thus, an employee who was paid an annual salary of $28,080 might have been exempt (assuming that the duties test was also met) last month, but now must make at least $31,200 annually to remain exempt from overtime pay.