California Wage Orders, What Are They & Why Employers Should Care
The California Industrial Welfare Commission has 17 wage orders that apply to different employers based on their industry or occupation. Although other than minimum wage, these wage orders have not been updated since 2001, they provide specific rules regarding a wide variety of employment compliance issues, such as overtime, expense reimbursements, uniforms, and suitable seating requirements.
The following provides a non-exhaustive list of key parts of the wage orders.
The minimum wage order applies to all employers. As of January 1, 2022, employers with 25 or fewer employees must pay employees a minimum wage of $14.00 per hour and employers with 26 or more employees must pay employees a minimum wage of $15.00 per hour.
All orders set forth which industry/occupation they apply. For example, Wage Order No. 1 applies to the manufacturing industry while Wage Order No. 6 applies to the laundry, linen supply, dry cleaning, and dyeing industry. The Department of Industrial Relations has issued guidance to inform employers of which Wage Order applies to them. Employers should also consult with their employment counsel regarding proper wage order classification.
Overtime and Exemptions
The wage orders generally set forth that eight hours constitutes a day’s worth of work. Each wage order includes daily and weekly overtime provisions that lay out the rate of overtime pay for employees who work more than eight hours in a day or forty hours in a week. In some orders, this section also sets forth requirements for an employer to implement an alternative workweek schedule.
The wage orders also lay out those categories of employees “exempted” from overtime pay. These categories are called exemptions and most wage orders contain at least three: the professional exemption, the executive exemption, and the administrative exemption. Each exemption contains distinct factors a position must pass to be considered exempt, such as minimum salary requirements and whether the employee is able to regularly exercise their discretion and independent judgment as part of their job. Employees who fall into these exemptions are not subject to certain parts of the wage orders, including the minimum wage, overtime pay, and meal period and rest break requirements. It is important when reviewing an exemption to verify what parts of the order the exemption apply.
Meal and Rest Periods
The wage orders restate the requirements for meal periods set forth in Labor Code 512. The wage orders are the basis for rest period requirements for employees. Under several of the wage orders, employers are required to provide 10-minute paid rest periods per 4 hours or a major fraction thereof.
The wage orders also include other regulations with which employers are required to comply, including providing uniforms and tools in certain circumstances, providing suitable seating when the work “reasonably permits the use of seats,” and keeping the temperature of the workplace at a level that provides “reasonable comfort consistent with industry-wide standards.”
Under the wage orders, employers are required to keep a copy of applicable orders posted in an area frequented by employees where it may be easily read during the workday. Where the location of work makes posting impractical, every employer shall keep a copy of the order and make it available upon request. As such, employers who are not familiar with the wage orders may want to review applicable industry orders and ensure they are either posted or available as soon as possible.