SDI Rate, Minimum Wage, Mileage Rate, Ag Overtime Changes Effective January 1, 2019

The New Year brings change, and there is no exception for employers.  With the transition into 2019, it is time to take note of a few key changes that will affect how you pay and reimburse your employees.

California SDI Benefits and Withholding Rate

It’s a new year, and California SDI benefits will be increasing. The SDI withholding rate continues to be 1.0% of wages. But, the taxable wage limit will increase from $114,967 to $118,371.

For new SDI claims (whether for short-term disability benefits or paid family leave benefits) the maximum weekly benefit will increase from $1,216 to $1,252 a week.

Minimum Wage

California is on track to have the minimum wage reach $15.00/hour for all employers by 2023 through a series of annual increases.  The chart below shows the new rates effective January 1, 2019.

25 or Fewer Employees 26 or More Employees
Minimum Hourly Wage $11.00/hour $12.00/hour
Minimum Exempt Salary $45,760/year $49,920/year


IRS Mileage Reimbursement Rate

This year the IRS mileage reimbursement rate for businesses has increased to 58 cents per mile, a 3.5 cent per mile increase over last year.  The mileage reimbursement rate for miles driven in the service of a charitable organization remains unchanged at 14 cents per mile. The mileage reimbursement rate for medical or moving purposes is 20 cents per mile driven, up 2 cents from the rate for 2018.

It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, except members of the Armed Forces on active duty moving under orders to a permanent change of station. For more details see Notice-2019-02.

Overtime for Agricultural Workers

California agricultural employers with 26 or more employees need to adjust their overtime calculations this year. Overtime calculations will remain unchanged for agricultural employers with 25 or fewer employees.  Day of Rest overtime requirements remain applicable for agricultural employers of all sizes.

View exceptions to the general overtime rule

California Wage Order 14 – Agricultural Occupations

“Protect your business – Prevent Penalties” brochure

The chart below shows how overtime should be calculated based on the hours worked and employer size:

25 or Fewer Employees 26 or More Employees
Daily OT (1.5 X Regular Rate) > 10 hours > 9.5 hours
Weekly OT (1.5 X Regular Rate) > 60 hours > 55 hours
Day of Rest Entitlement (1.5 X Regular Rate) First 8 hours on 7th Consecutive Day of Work First 8 hours  on 7th Consecutive Day of Work
Day of Rest Entitlement (2 X Regular Rate) > 8 hours on 7th Consecutive   Day of work > 8 hours on 7th Consecutive   Day of work


Sources: EDD.CA, IRS, DIR, Dickenson, Peatman & Fogarty |  2019 © Copyright Payroll Masters

Payroll Masters is not a licensed insurance broker or agent, law firm or accountancy and does not provide professional or legal advice and therefore Payroll Masters assumes no responsibility for claims arising from the use or implementation of any information proffered here or verbally. This document has been provided for informational purposes only and is not intended and should not be construed to constitute legal or financial advice. Please contact your attorney, CPA, insurance agent or financial advisor in connection with any fact-specific situation in which you intend to take significant employment action. Reader shall and does hereby indemnify, defend, and hold harmless Payroll Masters from and against any and all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries, and deficiencies, including without limitation interest, penalties, and reasonable attorney fees and costs, that either party may incur or suffer and that arise from, result from, or are related to this article, topics contained herein or any actions reader may have taken as a result of reading said article.