2020 Minimum Wage & HR Changes

Minimum Wage Changes

Effective January 1, 2020, the following minimum wages will be in effect:

State Minimum Wage
California’s minimum wage for employers with 26 or more employees will increase to $13.00 per hour. The minimum wage for employers with 25 or fewer employees will increase to $12.00 per hour.

State Rate Conditions
AK 10.19
AZ 12.00
AR 10.00
CA 12.00  <26 employees
CA 13.00  26+ employees
CO 12.00
FL 8.56
IL 9.25
ME 12.00
MD 11.00
MA 12.75
MI 9.65
MN 8.15  < $500K annual gross revenue
MN 10.00  $500K+ annual gross revenue
MO 9.45
MT 8.65
NJ 11.00
NM 9.00
NY 11.80  Eff 12/31/2019
OH 8.70
SD 9.30
VT 10.96
WA 13.50

Municipal Minimum Wage

State Municipality Rate Conditions
AZ  Flagstaff 13.00
CA  Belmont 15.00
CA  Cupertino 15.35
CA  Daly City 13.75
CA  El Cerritos 15.37
CA  Los Altos 15.40
CA  Menlo Park 15.00
CA  Mountain View 16.05
CA  Oakland 14.14
CA  Palo Alto 15.40
CA  Petaluma 14.00  <26 Employees
CA  Petaluma 15.00  26+ Employees
CA  Redwood City 15.38
CA  San Diego 13.00
CA  San Jose 15.25
CA  San Mateo 15.38
CA  Santa Clara 15.40
CA  Sonoma 12.50  <26 Employees)
CA  Sonoma 13.50  26+ Employees
CA  South San Francisco 15.00  Zip Codes – 94080, 94083, 94099
CA  Sunnyvale 16.05
NM  Albuquerque 9.35
NM  Bernalillo County 9.20
NM  Las Cruces 10.25
ME  Portland 12.00
NY  Nassau, Suffolk, Westchester 13.00  Eff. 12/31/2019
NY  New York City 15.00  Eff. 12/31/2019
WA  SeaTac 16.34
WA  Seattle 13.50  w/ Health
WA  Seattle 15.75  w/o Health
WA  Tacoma 13.50

Exempt Employee Minimum Salary
California requires that most exempt white-collar employees make double the state minimum wage. In 2020, the minimum salary for exempt employees of employers with 26 or more employees will be $54,080 per year. For employers with 25 or fewer employees, it will be $49,920 per year. Municipal minimum wages do not affect these minimums – the calculation is always based on the state rate.

The minimum salary for exempt computer professionals will be $96,968.33 per year or $46.55 per hour if paid on an hourly basis. The minimum hourly rate for licensed physicians and surgeons, if paid on an hourly basis, will be $84.79.

HR Changes

The following changes to Federal employment laws will take effect on January 1, 2020:

Form W4 Changes in 2020
Form W4, Employee’s Withholding Certificate, will be substantially different in 2020, as it has been redesigned to increase the transparency and accuracy of the IRS withholding system, and to comply with the withholding requirements of the Tax Cuts and Jobs Act. The IRS is not requiring all employees to complete a new W4 in 2020. The new form is required for all new hires in 2020 and for employees who want to make changes to their withholding in 2020. Employees can use the IRS Tax Withholding Estimator to check their withholding and ensure that the right amount of tax is being withheld from their paycheck.

FLSA Overtime Rule Change
On September 24, 2019, the Wage and Hour Division of the US Department of Labor announced a final rule regarding overtime pay under the Fair Labor Standards Act. The final rule will be effective on January 1, 2020, and it updates the earnings thresholds necessary to exempt white-collar employees from the FLSA’s minimum wage and overtime pay requirements. The final rule raises the standard salary level from $455 per week to $684 per week, and is intended to put overtime pay into the pockets of more than one million American workers.

Additional Time for Organ Donation
California previously required that employers of 15 or more employees provide up to 30 business days of paid leave for organ donation. The law now requires that those employees be provided with an additional 30 business days of unpaid time off to donate an organ, for a total of 60 days of protected leave in a 12-month period.

Expanded Lactation Accommodations
New state laws explicitly require that lactation accommodations meet the following requirements:

  • That the lacation room is safe, clean, and free of hazards
  • That the lactation room provides a place to sit and a surface to place a breast pump and personal items
  • That the lactation room provides access to electricity or charging devices suitable for an electric or battery-powered breast pump

The employer must also provide access to a sink with running water and suitable refrigeration close to the employee’s workspace. If a multipurpose room is the designated lactation space, use for lactation must be prioritized over all other uses.

Employers are required to make a policy and include it in the employee handbook or other set of policies that are distributed to employees. The policy should include the following:

  • A statement about an employee’s right to request lactation accommodation;
  • The process by which an employee should make the request;
  • The employer’s obligation to respond to the request, either by providing the time and space or responding in writing that they cannot; and
  • A statement about an employee’s right to file a complaint with the Labor Commissioner for violation of a right created by the law.

As with most laws that extend rights to employees, any adverse employment action or retaliation because an employee asked for, used, or complained about their rights (or denial of rights) is prohibited.

Employers with fewer than 50 employees may be exempt from a provision of this law if it would cause an undue hardship (significant difficulty or expense) but will be expected to make reasonable efforts to comply with as much of the law as possible.

Natural Hairstyles
Under both federal law and the California Fair Employment and Housing Act, it’s unlawful for an employer to discriminate based on certain protected characteristics, including race. California now defines race, for employment purposes, to include traits historically associated with race, including hair texture and protective hairstyles such as braids, locks, and twists.

Employers who have appearance policies that prohibit natural hairstyles should revise those policies. Managers and those involved in hiring should be trained not to make judgments about professionalism or culture fit based on these hairstyles and to consider their own unconscious bias.

New ABC Test for Independent Contractors
Businesses classifying an individual as an independent contractor must now establish that such a classification is allowed under the ABC test. To do so, the business entity must prove each of the following three factors:

(A)  that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
(B)  that the worker performs work that is outside the usual course of the hiring entity’s business; and
(C)  that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

DISCLAIMER: Abacus provides this content as a service to its readers and clients and cannot provide legal advice. While we can generally discuss employment laws and regulations, we cannot and will not advise on application of the law to your particular facts.  We provide general information which is not a substitute for legal advice.