CH&LA JanFeb 2017

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18 California Lodging News
Once the minimum wage reaches $15 per hour
for all businesses in 2023, wages could then be
increased each year up to 3.5 percent based on
the national Consumer Price Index.
It is important for lodging operators to bear in
mind that there are a number of other wage
and hour obligations that are based on the
minimum wage, and they will change with each
increase in the minimum wage:
• Overtime rate: The OT rate for employees
will be $15.75/$15 per hour for time
and one-half or $21/$20 per hour for
double-time.
• Exempt/nonexempt: Exempt employees
must be paid a monthly salary of at least
two times the minimum wage, and this
will change each time the minimum
wage increases. (e.g., on 1/1/17, the
minimum salary at a property with 26 or
more employees will increase to $3,640
from the current $3,447.)
• Posters and Notices: California em-
ployers must post a current Minimum
Wage Order in a conspicuous location
frequented by employees. A new notice
will be needed for 2017 when the increase
becomes effective. As of the writing
of this article, the Division of Labor
Standards Enforcement (DLSE) has not
issued a new Minimum Wage Order
reflecting these increases.
California employers must provide each
employee with a written itemized wage state-
ment—including all applicable rates in effect
at that time.
Employers in California must provide nonex-
empt employees with a written wage notice at
time of hire and again within seven calendar
days after a change is made to any information
in the notice (Labor Code section 2810.5).
If an employee’s rate of pay, including over-
time rate, will increase on January 1, 2017, due
to the minimum wage increase, the employee
must receive notice from his/her employer by
January 7, 2017. The separate wage notice is
not required if the employer has reflected the
change on a timely itemized wage statement
that meets all legal requirements.
• Meals and Lodging Credits: Historically,
whenever the minimum wage is in-
creased, DLSE has provided proportional
increases in the meal and lodging credits
that employers can take against their
minimum wage obligations. As noted
above, as of the writing of this article,
DLSE has not issued a new Minimum
Wage Order reflecting the new credits.
• Piece-rate employees: Labor Code sec-
tion 226.2 applies to “employees who are
compensated on a piece-rate basis for any
work performed during a pay period.”
In general terms, Labor Code section
226.2 establishes compensation and wage
statement requirements for piece-rate
employees with respect to:
(1) Rest periods. Every employer shall
authorize and permit all employees
to take rest periods, which insofar as
practicable shall be in the middle of
each work period. The authorized rest
period time shall be based on the total
hours worked daily at the rate of ten
(10) minutes net rest time per four (4)
hours or major fraction thereof.
(2) Recovery periods. For recovery
periods (“a cooldown period afforded
an employee to prevent heat illness,”
see Labor Code section 226.7), the
employer will need to determine the
amount of time that was “afforded”
(i.e., authorized and permitted), which
may depend on the circumstances.
The amount of time that was afforded
is the amount of time for which
California Minimum
Wage Increases
What You Need to Know
date 26 or more employees 25 or fewer employees
01/01/17 $10.50 per hour $10.00 per hour
01/01/18 $11.00 per hour $10.50 per hour
01/01/19 $12.00 per hour $11.00 per hour
01/01/20 $13.00 per hour $12.00 per hour
01/01/21 $14.00 per hour $13.00 per hour
01/01/22 $15.00 per hour $14.00 per hour
01/01/23 $15.00 per hour $15.00 per hour
The series of increases in California’s min-
imum wage that begins January 1, 2017, is as follows: