Ace Slater was very excited for his first summer job at Marble's Mochi Magic. Lilah Spano, Ace's high school crush, loved mochi and thought it would be a great way to see her over the summer. Marble agreed to pay Ace minimum wage to work the register at the store.

Ace was paid $8.00 per hour for his work at Marble's Mochi Magic. Starting July 1, 2014, Ace was promoted to assistant store manager for his dedication to the mochi making process. Ace was very excited and hoped Lilah would be impressed with his new promotion. Along with his promotion, Ace also started working 50 hours a week and his pay rate was increased to $8.50 per hour. Marble also told Ace that because he was now assistant manager he would not be paid overtime.

Ace recently found out that California minimum wage was increased to $9.00 per hour and told Marble about it.

Q: Does Marble need to pay Ace for the increase in minimum wage?

A: Yes. As of July 1, 2014, Marble was required to pay Ace at least $9.00 per hour for every hour Ace worked. While Ace did get a pay raise it was still $0.50 short of the minimum wage requirement.

Q: Does Marble need to pay Ace for overtime?

A: California Labor Code Section 510 states that employees should be paid 1.5 times their hourly rate for all hours worked over 8 in a work day, 40 hours in a workweek and the first 8 hours worked on the seventh consecutive workday. There is an overtime exemption for executive employees, which is often used for managers; however there are specific requirements all must be met in order to qualify.

Per the Department of Labor Standards and Enforcement, A person employed in an executive capacity means any employee:

Whose duties and responsibilities involve the management of the enterprise in which he or she customarily recognized department or subdivision thereof; and
Who customarily and regularly directs the work of two or more other employees therein; and
Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring and as to the advancement and promotion or any other change in status of other employees will be given particular; and
Who customarily and regularly exercise discretion and independent judgment; and
Who is primarily engaged in duties, which meet the test of the exemption.
An executive employee must also earn a monthly salary equivalent to no less than two times the minimum wage for full-time employment. Full time employment means 40 hours per week.

Unfortunately for Marble, Ace is entitled to overtime. Ace was given no new responsibilities with his promotion in addition to his cash register duties, just a new shiny name tag. Additionally, Ace was only paid $8.50 per hour, and to be considered exempt he would need to be paid $18.00 per hour. Marble will need to pay Ace for all of the overtime he worked, in addition to paying Ace the difference in pay for the minimum wage increase.

If you have any questions regarding California's wage and hour laws, call 310-461-3766 to speak with the attorneys at The Rad Firm.