California Laws Raising Minimum Wages, Expanding Leave for 2021

California’s labor and employment laws are ever-changing and abundant, challenging employers to keep up with new state laws and local ordinances, two California payroll experts said May 20.

Keeping up with new, local, and Covid-related wage and hour requirements is challenging for employers, the speakers said at the American Payroll Association’s 2021 Congress Xstream.

“If you can do payroll in California, you can do payroll anywhere,” said Rebecca Harshberger, CPP, vice president of payroll tax for Entertainment Partners.

Localities Offer Hazard Pay

Ordinances on hazard pay, also known as “hero pay,” have been enacted in about 30 California localities within the last five months, said Sondra Dougherty, CPP, consultant and owner of Employer Compliance Services.

Under the ordinances, employers must provide an immediate, but often short-term, hourly wage increase to frontline and essential workers, such as grocery store employees, who perform in-person work during the pandemic.

The hazard pay lasts in most of the localities for up to four months and ranges from $3 in San Jose to $5 in American Canyon.

Other localities that have enacted hazard pay include Alameda, Benicia, Berkeley, Buena Park, Coachella, Concord, Costa Mesa, Culver City, Daly City, El Monte, Irvine, Long Beach, Los Angeles, Malibu, Millbrae, Montebello, Oakland, Palm Springs, Redwood City, Richmond, San Francisco, San Jose, San Leandro, San Mateo, Santa Ana, Santa Clara, Santa Monica, South San Francisco, and West Hollywood.

Synchronizing Wage Changes

Meanwhile, in 2021, California employers with at least 26 employees are paying at least $14 per hour and those with 25 or fewer employees are paying at least $13 per hour, under 2016 legislation that is phasing in a uniform $15 hourly state minimum wage by 2023, to be followed by annual inflation-related minimum-wage adjustments, Dougherty said.

Exempt California employees generally must earn at least double the minimum wage, so employers with exempt employees who earn amounts that are close to these limits will have to annually review the employees’ salaries to ensure they are keeping up with the minimum-wage increases, Dougherty said.

Currently, exempt employees who work for an employer with at least 26 employees must earn $4,853.34 per month or $58,240 annually while those working for an employer with no more than 25 employees must earn $4,506.67 per month or $54,080 annually to meet the applicable exemption salary, she said.

Meanwhile, the hourly rate for exempt computer professionals in 2021 is $47.48 per hour, $8,242.32 per month, or $98,907.70 in 2021, Dougherty said. For licensed physicians, it is $86.49 per hour.

California has about 40 cities and counties with their own minimum wage ordinances, Dougherty said. “If you have any employees that are working in any of these areas, it’s important that you know what that local minimum wage ordinance says,” she said.

Employers will have to stay on top of the minimum-wage increases every year from now on to ensure exempt employees’ salaries continue to reflect at least double the applicable minimum wage.

Supplemental Leave: Coming Back Strong

Covid-19 supplemental paid sick leave protections that expired on Dec. 31, 2020, were extended through Sept. 30, 2021, and made retroactive to Jan. 1, 2021, under a California bill (S.B. 95) that was enacted March 19, Dougherty said.

California’s Covid-19 supplemental paid sick leave came back stronger than before under the bill, which for sick leave that occurs from Jan. 1, 2021, to Sept. 30, 2021, requires employers that had more than 25 employees in the past year to allow eligible employees to use supplemental paid sick leave if they are unable to work for certain reasons related to Covid-19. Previously, employers with at least 500 employees were required to comply with this requirement, Dougherty said.

Coverage also was provided under the bill’s provisions to employees working remotely from home, to employees who are getting vaccinated or recovering from vaccine side effects, and to employees caring for family members or taking time off to care for children while their school is closed because of Covid-19, Dougherty said.

Full-time employees get 80 hours of leave starting Jan. 1, 2021, under the supplemental sick leave bill’s provisions, she said.

Meanwhile, part-time employees with a regular weekly schedule are entitled to the number of hours that they are normally scheduled to work over a two-week period, and part-time employees with variable schedules are entitled to 14 times the average daily number of hours worked over the past six months, Dougherty said.

The leave is capped at $511 a day per employee or $5,110 in total for each employee.

Meanwhile, several California localities also established their own Covid-19 supplemental sick leave requirements, and they generally did so within the last six months. The localities that established these requirements include Los Angeles, Long Beach, Oakland, Sacramento, San Francisco, San Jose, San Mateo, Santa Rosa, and Sonoma, Dougherty said.

Just as with local minimum wage ordinances, employers must ensure they are following these local supplemental paid sick leave ordinances if they have employees in these particular areas, Dougherty said. A few of the ordinances already have expired while some requirements in the Los Angeles, Long Beach, and Oakland ordinances have no expiration date, she said.

Recent, Potential Wage-Hour Developments

New Covid-related laws are still being considered, Dougherty said. For example, legislation is being considered that if enacted would require some employers to rehire people who were laid off because of Covid-19, she said.

Meanwhile, recent California legislation and litigation have addressed independent contractor determinations, the compensability of security screening time, and the practice of rounding break time, the speakers said.