Continued from page 9 Considine & Considine is a full service public accounting firm offering professional and personalized services to business and professional practice owners in the areas of audit, taxation, accounting, estate and retirement planning. Philip Smith, CPA Considine & Considine 8989 Rio San Diego Drive, Suite 250 San Diego, CA 92108 619-231-1977 x103 www.cccpa.com prs@cccpa.com Let us help guide your business development. to earn more than $23.25 per hour and satisfy all other requirements to qualify for the exemption. • Increase in tool-pay. Employees required to supply and maintain their personal hand tools to perform their job must be paid California’s “tool wage,” equivalent to double the state minimum wage, or $31 per hour, starting in 2023. • Non-sales activity and rest-period pay. Employees paid commissions or on a piece-rate basis will also need to be paid at least the increased minimum wage rate for nonsales activity and rest period time. Employers may need to review employee compensation plans to determine whether the pay plans need to be updated or revised to be consistent with the increased minimum wage rate. • Split-shift premiums. The minimum wage section of the Wage Orders provides that employees who work split shifts are entitled to an extra hour of pay at the minimum wage (although employees paid higher than the minimum wage may receive credits toward the one-hour premium). • Meal and lodging credits. The Wage Orders provide certain minimum-wage meal and lodging credits that will change when the minimum wage increases. How Should Employers Prepare for Minimum Wage Increases? With minimum-wage increases on the horizon, employers should forecast these changes in their fiscal planning and determine the potential impact on business operations to plan and prepare for these changes in the near future. Among other steps, many employers will likely increase consumer prices to cover higher labor expenses. The increase in the minimum wage may also pressure employers to increase wage rates across the organization, not just those who will benefit from the minimum wage increase. This may be especially true for employees already being paid in the $20 to $25 range, who may expect or demand a pay raise in light of the increase to the minimum wage for less skilled or experienced workers. Consider auditing your pay practices and reviewing employee compensation plans to ensure compliance with current wage and hour requirements and prepare for any updates needed to your policies and practices well in advance of Jan. 1, 2023, the effective date (or July 1, 2022, in some localities) for minimum wage increases. With wages continuing to rise, the potential exposure and liability for non-compliant employment practices will also rise. Employers dealing with lawsuits or complaints about their pay practices should seek creative solutions. Fisher Phillips is here to help employers navigate these tumultuous times. Because of the far-reaching implications of a minimum-wage increase, now is the time to act, as 2022 continues to be a challenging year for businesses and employers. Make sure you are subscribed to Fisher Phillips’ Insight System to get the most up-to-date information. Please reach out to your Fisher Phillips attorney, the authors of this Insight, or any attorney in our California offices with any questions or to discuss any of the topics addressed above. With minimum-wage increases on the horizon, employers should forecast these changes in their fiscal planning and determine the potential impact on business operations to plan and prepare for these changes in the near future. 10 San Diego Dealer
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