Minimum Wage Increases on January 1st, 2021

minimum wage increases

A new year means new changes for minimum wage laws throughout the United States. From state to state, employers are facing updates to minimum wage increases that may affect their employee base. In California, where more than 137,000 trucking companies (most of them small) operate, trucking companies are following their own changes that took effect on January 1st that impact both nonexempt and exempt employees.

California’s statewide minimum wage is now $14 per hour for employers with 26 or more employees and $13 per hour for employers with 25 or fewer employees. But some local ordinances have a higher minimum wage than the state law, and some local regulations eliminate any distinction in minimum wage based on employer size. This moves the state and the companies inside it one step closer to its goal of a $15 per hour minimum wage.

In addition to California’s statewide minimum wage increases, many cities and counties have enacted their minimum wage laws that go beyond state requirements. If a local minimum wage rate is more substantial to employees than the state-mandated minimum wage rate, employers must comply with local law.

Local, State, and Federal Minimum Wage Differences

Most employers in California comply with both the federal and state minimum wage ordinances. Also, local cities and counties are allowed to enact minimum wage rates. Many different cities have recently adopted laws that establish a higher minimum wage rate for employees working within their local areas.

The effect of this coverage by various government sources is that when there are conflicting requirements in the mandates, the employer has to follow the stricter standard, or most beneficial to the employee. Since California’s current ordinance requires a more significant minimum wage rate than the federal law, all employers in the state subject to both laws have to pay the state’s minimum wage rate unless their employees are exempt under state law.

Similarly, suppose a local entity, such as a county or city, has adopted a higher minimum wage. In that case, employees have to earn the local wage where it is higher than the state or federal minimum wage levels.

So, What Does This Mean for the Trucking Industry?

Some 25,000 truck drivers haul goods from Los Angeles and Long Beach’s shipping ports to nearby storehouses and rail years. From there, the goods are moved to U.S. retailers and manufacturers. Since 2011, nearly 1,000 drivers in California have been filing complaints against trucking companies for workplace violations, including wage disputes.

Issues like these and other workplace violations all impact a company’s Trucking insurance rates. Trucking companies need to ensure they are doing what they must to stay compliant with minimum wage increases, insurance needs, workers’ compensation, and more. While truckers make more than the minimum wage, there are other part-time employees within a trucking company who might not make the minimum wage, but by law will have to begin now.

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