CA Minimum Wage increases 2024 - money with an upwards facing arrow to indicate growth
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CA Minimum Wage 2024

‘Tis the season for employment law changes in California! We hope you are enjoying the start of the holiday season, which for us at Total Package HR means we are digging deep into what’s coming next in the new year.

Join us for Get Ready for 2024 (Employment Law Update Edition)! Each week we will highlight a new law coming in 2024. We’ll start with the ones that will require the most action and end with the good-to-knows.

If you need assistance with executing any of these new requirements or are unsure if it is applicable to your business, we are here to help!

California Minimum Wage Updates – January 1, 2024

Starting off strong with another update to minimum wage! State-wide minimum wage is set to increase to $16.00 per hour starting January 1, 2024. All businesses, regardless of headcount, will be subject to this rate. With the change of the state minimum wage comes the increase of minimum salary an exempt employee must be paid (same duties test applies!). The minimum salary will increase to $66,560 annually.

As always, various cities throughout California will have their own minimum wages that are above the state’s.

Here are the ones currently released:

NOTE! Richmond, San Leandro, Santa Clara and Sunnyvale have not released their January 2024 minimum wages as of the date this newsletter is written – the rates shown above for those cities are still the rates effective January 2023. If you have employees in these cities, please be sure to keep an eye on your local municipalities for updates prior to the new year!

As a reminder, many cities in California have minimum wage updates that happen in July rather than January. Keep an eye out for our Mid-Year Minimum Wage Update next year once those rates are released!

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2024 CA Paid Sick Leave Updates

We have some new updates for California Paid Sick Leave for 2024! Seems like a trend every year. Last year, California updated the definition of a family member to include a “designated person”. This means an employee can use paid sick leave for any person who has a family-like relationship to the employee, even if they are not related by blood.

This year, the update comes to the amount of paid sick leave required for all employers in the state of California.

Here are the updates effective January 1, 2024:

  • Employees will now be able to use 40 hours or 5 days of paid sick leave per 12-month period (calendar year, anniversary year, or other specified by the employer). Previously, employers were only required to provide 24 hours or 3 days of paid sick leave, unless they were in a city with different requirements.
  • Employees must be able to accrue 80 hours or 10 days of paid sick leave per 12-month period.
  • Employees must be able to carry over up to 40 hours or 5 days of unused sick hours each 12-month period.

Here’s what’s not changing:

  • Employees can begin using paid sick leave after 90 days of employment.
  • If on an accrual basis, employees accrue 1 hour of paid sick leave for every 30 hours worked.
  • If on a frontload basis, the entire amount of paid sick leave must be available as of the first day of employment or as of the start of the new 12-month period (though use can still begin after 90 days of employment).
  • The amount of paid sick leave in an employee’s bank must be shown on the employee’s pay stub.
  • Employees may choose how many paid sick leave hours they use for a shift, up to their normal scheduled hours. For example, an employee who is scheduled to work 10 hours may use up to 10 hours of paid sick leave for that shift or can choose to use less than 10 hours.

Now this may not be a big change for your business if you are located in any of the seven cities with their own paid sick leave laws: Oakland, San Francisco, Berkeley, Santa Monica, Emeryville, City of Los Angeles, and San Diego. These cities already required employers, based on size, to provide 40 hours or more per 12-month period. However, if you have employees who work alternative work schedules in any of those cities, we recommend you reach out to TPHR to learn more about how the 2024 paid sick leave updates will affect those employees!

We recommend you review your Paid Sick Leave and/or Paid Time Off policies to ensure they will be compliant with the updates for the new year!

COVID-19 Form I-9 Exceptions Expiring Soon
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I-9 Flexibility is Over

I-9 Compliance Update

COVID-19 Form I-9 Exceptions Expiring Soon!

During the peak of the pandemic (and then for some time after), the Department of Homeland Security (DHS) and U.S. Immigration and Customs Enforcement (ICE) announced various extensions the Form I-9 requirement to review documents in person for employees working remotely as a result COVID-19 precautions. Instead, employers were allowed flexibility in how they reviewed documents, such as via video conference call or a scanned copy. This flexibility did not completely remove the requirement to review documents in person, rather it extended the timeline. The expectation was (and still is) that when COVID-19 precautions faded, employers would then examine the I-9 documents they reviewed virtually, in person.

Well folks, we’ve reached that point! DHS will not be extending its most recent deadline and will sunset the accommodation on July 31, 2023.

So, what does this mean?

It means that employers will need to review, in person, Form I-9 documents that were virtually examined for any employees hired on or after March 20, 2020 (when the original temporary guidance was released). Anyone hired prior to this date, or anyone not working remotely due to COVID, should also have technically already been examined in person, per I-9 requirements. The physical inspection should be completed by July 31, 2023. Now, will DHS be standing at your front door on August 1st demanding to look at your I-9’s? Probably not – so there is some flexibility with the timeline as long as it is completed as soon as feasible.

DHS has specified that once normal operations resume, the employer must physically inspect the original documents that were presented in an alternate format, and complete Section 2 of the Form I-9 Additional Information to say “documents physically examined” along with the date. If the person who originally completed Section 2 and performed the remote inspection is no longer able to examine the physical documents, then you must also list the full name and title of the person who physically examined the documents. DHS has provided the example below.

We understand it is not possible to fly every remote worker to your headquarters to present these documents – rest assured there are other options! Some background check vendors have authorized representatives who can review the physical documents on your behalf. There are also other remote Form I-9 vendors that we are happy to recommend who can assist! However, if you know a remote employee will be visiting your office soon, this would be a good time to also have them present their documents to finalize their Form I-9.

Moving Forward…

Starting August 1, 2023, employers will no longer be able to examine I-9 documents virtually and will need to examine physical documents within 3 business days – the same rules that applied prior to COVID. If you hire most or all your employees remotely, you may need to work with a vendor as mentioned above, to ensure your I-9’s are compliant.

Every employee is required to complete a Form I-9 – let this message also serve as a friendly reminder to complete an I-9 audit if you haven’t done so in over a year (we recommend annual audits)!

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2022 Mid-Year Minimum Wage Update

Keeping up with California’s minimum wages is almost a full time job. We have over 40 minimum wage rates to keep track of as California Employers! But TPPS is here to help keep you on track. Here’s the latest as of July 1, 2022. 

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2022 Minimum Wage Updates!

Here we go again. Tis the season for minimum wage increases. California has 30 different minimum wages, as well as two categories for employers for the state-wide minimum wage. Also, often overlooked, the California exempt salary minimum is tied to the State’s minimum wage – that is Exempt employees must be paid two times the State’s minimum wage. For employers with up to 25 employees that is $58,240 per year, and for employers with 26 or more employees the minimum is  $62,400 per year.  

Important Information for 2022 W-2 Filings
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Important Information for 2022 W-2 Filings

Attention! Important information regarding 2022 W-2 Filings and updates on filing requirements:

Taxpayer First Act: 

· 2022:By midnight on January 31, 2022, Employers that send 100 or more W-2’s must send them electronically in 2022 (pending final regulations from the IRS).

· 2023: By midnight on January 31, 2023, electronic W-2’s will be required for Employers sending 10 or more.

· Additional information and options on free filing can be found at the Taxpayer First Act page

· Additional provisions, IRS modernizations, and electronic filing of return information can be found HERE

2021 Tax Year wage reports must be filed with the Social Security Administration (SSA) by February 1, 2022.

The SSA now provides a new way to upload W-2 files if they meet SSA specifications for electronic filing W-2 (EFW2)

· If software creates an EFW2 format, employers are encouraged to consider Wage File Uploads rather than keying in individual W-2s

· To learn more about Wage file Uploads, click HERE

o Benefits of Wage File Uploads:

§ Files can be uploaded to process for FREE

§ Saves time and reduces potential errors

§ Register for Business Services Online

· How it Works:

o SSA will process employer files in real-time and provide results of either Success or Reject immediately following upload

o Rejected files will be provided the errors on the upload screen

o Wage File Identifier (WFID) will not be delivered until the errors have been fixed, the file resubmitted, and accepted

· Additional Information:

o Tutorial

o Infographic

o Video

o Training package

Organizations with less than 100 W-2s? There are FREE services for you too! W-2 Online is available for smaller businesses!

Benefits:

· Looks just like paper W-2 but it is on the SSA website

· Ability to key up to 50 W-2s per report

· Ability to generate multiple reports

· W-2C is also available online

· Checklist for W-2/W-2C Online Filingis provided

· Register for Business Services Online

Reporting Deferred Payroll Taxes

If payroll taxes were deferred for your employees in 2020 and collected in 2021, a W-2C will need to be sent to correct Tax year 2020 Social Security Taxes. Helpful information can be found in the links below:

· IRS W-2 & W-2C Instructions

· W-2 Reporting of Employee Social Security Tax Deferred under Notice 2020-65

· IRS News Release

· More Information 

· Remember that 2021 Tax Year wage reports must be file with the Social Security Administration (SSA) by February 1, 2022.

Truncated Social Security Numbers (SSNs)

· SSNs may be truncated on W-2s, except on Copy A

· Any W-2s with truncated SSNs on Copy A will not be accepted

· Copy A requires that all nine (9) digits of the SSN are visible

· IRS instructions on Truncated Taxpayer Identification Numbers can be found HERE

Verification of SSNs

· Verification of employee’s reported name and SSN can be confirmed at the Verify SSN page

· Employer Correction Request Notices (EDCOR) were discontinued in 2021 and will no longer be mailed

Need more Assistance? Visit the SSA Employer Page for videos, tutorials and other useful tips, links, and information. 

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