California employers should take note of the recently approved increase in California’s minimum wage, which will raise California’s current rate of $8.00 per hour to $9.00 per hour by July 1, 2014, and to $10.00 per hour by January 1, 2016. With Governor Brown’s signing of Assembly Bill 10 (AB 10) on September 25, 2013, California has become the first state to mandate a minimum wage of $10.00 per hour, well above the current federal minimum wage of $7.25. Such an increase in the minimum wage means that employers must also increase the amount of overtime wages paid to their employees who work more than eight hours a day or more than 40 hours a week (i.e., for employees being paid in minimum wage, overtime rates will be $13.50 per hour beginning on July 1, 2014, and $15.00 per hour beginning January 1, 2016).
Employers who fail to pay the minimum wage are subject to damages equaling the unpaid balance of the full amount of the minimum wage, plus interest on any such amount, attorney’s fees and costs, and civil penalties. Civil penalties will be levied at $100.00 for each initial violation and $250.00 for each subsequent violation, per employee, for each pay period for which the employee is underpaid.
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This article was originally published by Bingham McCutchen LLP.