Most employers know that they will have to begin paying their employees a minimum of $9.00 an hour as of July 1, 2014. In addition to effecting their hourly/non-exempt employees, this change may also effect some of their salary/exempt employees.

Presently, exempt employees (for many businesses, its managers) must be paid at least $2,774 per month/$33,288 a year due to California’s requirement that exempt employees make at least twice the minimum wage for a standard 40 hour work week. After July 1, 2014, employers will need to pay those same employees at least $3,120 per month/ $37,440 per year, or a raise of $4,152. After January 1, 2016, when the minimum wage increases to $10.00 an hour, employers will have to pay those same employees at least $3,467 per month/$41,604 per year.

Employers must take these cost increases into account when thinking about their strategic planning for 2015 and beyond.