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	California Increases Minimum Wage to Highest in the Nation Employment/Labor  September 14, 2006 As expected, Gov. Arnold Schwarzenegger signed a bill Tuesday to give California the highest minimum wages in the nation. The law increases the hourly rate by 75 cents on January 1, 2007, followed by another 50 cents on January 1, 2008, boosting the rate from $6.75 an hour to $8. The rate hike will also affect certain exempt employees who must, to qualify for overtime exemption, earn a monthly salary that is at least two times the minimum wage. The governor supported a straight $1-an-hour increase but compromised on the $1.25-an-hour boost with no annual adjustment. With the new law, California joins Massachusetts as having the nation's highest minimum wage. Massachusetts also will boost its rate to $8 an hour by 2008 after lawmakers were able to override a veto this summer by Republican Gov. Mitt Romney. The measure is expected to impact over a million Californians who earn minimum wages. In addition, the law requires that exempt employees be paid a minimum salary of two times the state minimum wage. Therefore, the increase in the minimum wage will result in an increase in the minimum salary for exempt employees in 2007 to $31,200 and, in 2008, to $33,280. The increase will also affect the collective bargaining exemption. The hourly pay rate required for the collective bargaining exemption in 2007 will be $9.75 and, in 2008, it will increase to $10.40. In preparation for implementation of the new minimum wage rate, employers should review their compensation practices now to ensure compliance. Look for the upcoming issue of Berger Kahn's Employment Law Alert for a full discussion on complying and implementing the new minimum wage rate. ********** For further information or questions regarding this eAlert, please contact Wayne Hersh at 949-474-1880. The Berger Kahn Labor & Employment Group publishes eAlerts on timely labor and employment issues. This eAlert is intended for general information purposes only, and does not constitute legal advice. Labor & Employment Contacts: Wayne Hersh 949-474-1880 whersh@bergerkahn.com Jon Miller 949-474-1880 jmiller@bergerkahn.com Berger Kahn, 2 Park Plaza, 6th Floor, Irvine, CA 92614 ©2006 Berger Kahn, A Law Corporation. All Rights Reserved. Back
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