Major Changes Facing California Employers In 2001

Beginning January 1, 2001, the state minimum wage increased from $5.75 to $6.25 an hour. The Industrial Welfare Commission unanimously approved the increase, to be followed by an increase to $6.75 an hour starting January 1, 2002.

The phase-in was a compromise, recognizing employer concerns over the potential impact of one sudden large increase.

Beginning January 1, 2001, any business or government entity that is required to file a federal Form 1099-MISC for services performed by an independent contractor also must comply with the new state independent contract reporting requirements under SB 542 (Burton).

Companies must report to the Employment Development Department (EDD), using Form DE 542, within 20 days of either making payments totaling $600 or more or entering into a contract for $600 or more with an independent contractor in any calendar year, whichever is earlier.