You might be wondering, how does California’s new tiered minimum wage law affect employers of seasonal employees?
The number of employees an employer has determines which wage rate applies. As such, employers with seasonal or intermittent employees must reevaluate which wage rate applies each time their workforce expands or contracts. In these situations where the employer’s employee list fluctuates due to seasonal or intermittent employees, employers should look closely at the facts of each pay period to prevent employees from claiming underpayment. Be inclusive and look at whether every employee was counted, regardless of whether or not they are exempt from overtime, the number of hours they worked or their location.
If there is any uncertainty, the court will always construe the law in the way most favorable to the employees. The labor code statutes are put in place to protect employees- not employers! Thus, the best advice when dealing with a tiered minimum wage is for employers must err on the side of caution and, if at any time, they have 26 employees, the employer should compensate its employees at the higher minimum wage rate for the entire pay period and continue paying at the higher minimum wage rate until the employer no longer has 26 employees. As an added incentive for employers to be diligent in determining what wage rate applies, a wrong decision to not pay the higher minimum wage rate to their employees can end costing the employer penalties and interest- an addition to the alleged underpaid wages!
While living in a tiered minimum wage system, as the workforce contracts or expands, the employer may need to increase or may lower the wage rate. Employers are required to give advance written notice whenever the employer makes a change to the employee’s rate of pay. If at any time an employer employs less than 26 employees, there is no requirement that employers immediately pay their employees at the lower minimum wage rate. However, in such instances, the employer will need to decide if the administrative time and costs and the potential for error during a specific pay period will outweigh any amount saved in switching back to paying the lower minimum wage rate when the workforce dips below 26 employees. Likewise, if at any time the employer’s workforce reaches 26 employees or more, employer will again need to pay the employees at the higher minimum wage rate.
Employers of seasonal or intermittent employees must be extra diligent in tiered minimum wage system and keep track of the number of workers that qualify as employees because the wage rate must be raised to the higher wage rate once the employer has 26 employees. What may seem like a small mistake may snowball into a large one- with very real and negative financial consequences for the employer.