New (Higher) Minimum Wage and New (Lower) Mileage Reimbursement Rate
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Mileage Reimbursement Rates
Effective January 1, 2016, the IRS standard mileage reimbursement rate is 54 cents per mile. This number decreased from 57.50 cents per mile set in 2015 due to the lower cost of gasoline.
Employers should ensure that employees are tracking expenses and submitting expense reports for actual business mileage.
Remember, the IRS rate is a safe harbor that should suffice in most situations. However, if an employee claims that his or her actual vehicle maintenance costs are higher, the employee has the right to that reimbursement if the employee can prove that his/her maintenance costs are indeed higher.
Recall also that both California and Federal law prohibit any kind of workplace retaliation against employees who assert their right to these wage or expense reimbursement payments.
Increase in Minimum Wage
Effective January 1, 2016, the California minimum wage rate increased to $10.00/hour, up from $9.00. Employees may not waive this right.
This increase also impacts who qualifies as an overtime "exempt" employee. Because of the new minimum wage, exempt employees must now earn an annual salary of no less than $41,600 ($800/week). In addition, you must be sure that these employees spend at least 51% of their average workweek engaged in what the lawmakers consider truly "exempt" duties.
Employers should also be aware that there are numerous industry specific, city and county ordinances that have established even higher minimum rates of pay which must be followed if your business is covered by one or more of these rules. For example, businesses operating within the City of Los Angeles, with 25 or more employees, must pay a higher minimum wage of $10.50 per hour beginning July 1, 2016. And, larger hotels located within the City of Los Angeles are already obligated to pay a considerably higher minimum wage of $15.37. Businesses that contract with various federal and state governmental agencies also are subject to higher so-called "Living Wage" or "Prevailing Wage" obligations.
To discuss your specific organization or if you have any questions about the above, please call your firm contact at 818.508.3700, or visit us online at www.brgslaw.com.
Sincerely,
Katherine A. Hren
Richard S. Rosenberg
Ballard Rosenberg Golper & Savitt, LLP
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