New Employment Laws: How Will They Affect Your Business?

March 27, 2019

New Employment Laws: How Will They Affect Your Business?

A slate of new employment laws came into effect on January 1, 2019, and they’re just the beginning of an ongoing increase in changes to California’s minimum wage and overtime regulations. If you’re an employer, keeping on top of these laws will be imperative through 2025, when the regulations reach their full effect. Control your scheduling and budgeting now and you’ll limit the impact to your bottom line.

Minimum wage changes. On January 1, the minimum wage increased to $11/hour for employers with 25 or fewer employees and to $12/hour for employers with more than 26 employees. This is another step in the series of scheduled increases through 2023, when the minimum wage will top out at $15/hour.

Ag overtime. The agriculture industry has been exempt from standard overtime laws because most employees are independent contractors; but, that changed on January 1. Over the next four years, large employers will be required to comply with regular overtime laws (small employers will have seven years to get in line with the new regulations).

The new rules include a clarification of the day-of-rest requirement: Employees who work more than eight hours on the seventh consecutive day of work will be compensated at double time. This is a change from the previous standard, which applied to every rolling seven-day period. To avoid extra charges, don’t schedule employees to work more than eight hours per day on the seventh day of the workweek.

 

Date

Small Employer

25 employees or less

Large Employer

26 employees or more

Daily OT

Weekly OT

Daily OT

Weekly OT

January 1, 2018

>10 hours/day

>60 hours/week

>10 hours/day

>60 hours/week

January 1, 2019

>10 hours/day

>60 hours/week

>9.5 hours/day

>55 hours/week

January 1, 2020

>10 hours/day

>60 hours/week

>9 hours/day

>50 hours/week

January 1, 2021

>10 hours/day

>60 hours/week

>8.5 hours/day

>45 hours/week

January 1, 2022

>9.5 hours/day

>55 hours/week

>8 hours/day

>40 hours/week

January 1, 2023

>9 hours/day

>50 hours/week

 

 

January 1, 2024

>8.5 hours/day

>45 hours/week

 

 

January 1, 2025

>8 hours/day

>40 hours/week

 

 

 

Special considerations for piece-rate employees. Piece-rate employees — those paid by the bin, crate, etc. — are now entitled to a separate hourly wage for their rest periods and other non-productive times. This separate wage must be in line with minimum wage. To manage these expenses, employers may offer a guaranteed payment at minimum wage for a certain number of hours to cover rest periods.

Planning ahead is essential when managing these new changes to California’s labor laws. You may have to pay more attention to your scheduling and adjust where needed to avoid extra costs. If your system is automated, check the numbers every few days to monitor workers’ time and see where you can adjust hours. If your employees are still using physical punch cards, it might be wise to invest in a more up-to-date system that will allow you to course-correct as needed.

A thorough budget is your best ally through these important changes. We can help you set up a budget so you can adjust your prices and forecast appropriately. Use our convenient Cost Estimator tool to get started, then schedule a session with a member of our Ag Team to review your numbers and create a plan of action.

We look forward to helping you through these important changes. Contact LeeAnne DeCosta at ldecosta@gccpas.net or give us a call at (209) 527-4220 to get the process started.

200 West Roseburg Avenue
Modesto, CA 95350

(209) 527-4220 (phone)
(209) 527-4247 (fax)

https://www.grimbleby-coleman.com/resources/articles/196

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