Under California employment law, employees are generally classified as exempt or non-exempt . Non-exempt employees are eligible for overtime, rest and meal breaks, and are subject to California’s minimum wage laws. Exempt employees may not be eligible for overtime or breaks.
Exempt employees in California generally must earn a minimum monthly salary of no less than two times the state minimum wage for full time employment. Simply paying an employee a salary does not make them exempt , nor does it change any requirements for compliance with wage and hour laws .
For 2021, this means exempt employees must receive a minimum annual salary of $58,240 for employers with more than 26 employees, and $54,080 for employers with 25 employees or less. The base salary must be fixed and recur each pay period without variance due to hours, quantity, or quality of work performed.
In most cases, there are three simple requirements to determine whether a worker is an exempt employee under California law: Minimum Salary. The employee must be paid a salary that is at least twice the state minimum wage for full-time employment . White Collar Duties. Independent Judgment.
The default rule is that all employees are not exempt and must receive overtime, meal breaks and rest breaks . An employee cannot simply agree to be considered exempt from overtime.
Most employers expect their exempt employees to work the number of hours necessary to get their jobs done. It doesn’t matter if that takes more or fewer than 40 hours per week. Even if your exempt employee works 70 hours in a week, you are still only required to pay them their standard base salary.
Employers are not required to pay exempt employees overtime or paid rest breaks . However, exempt employees do qualify for unpaid meal breaks . Additionally, California law applies differently to different industries.
To be exempt , even if working part – time , an employee has to pass both the salary test and duties test requirements. An employee who meets the salary test requirements and is primarily engaged in exempt duties may be properly classified as exempt .
Schedule for California Minimum Wage rate 2017-2023.
|Date||Minimum Wage for Employers with 25 Employees or Less||Minimum Wage for Employers with 26 Employees or More|
|January 1, 2017||$10.00/hour||$10.50 /hour|
|January 1, 2018||$10.50 /hour||$11.00/hour|
|January 1, 2019||$11.00/hour||$12.00 /hour|
|January 1, 2020||$12.00 /hour||$13.00/hour|
On April 4, California Governor Jerry Brown signed SB 3 into law. The new law increases the minimum wage to $15 per hour by Jan. 1, 2022, for employers with 26 or more employees. For employers with 25 or fewer employees the minimum wage will reach $15 per hour by Jan.
Exempt Standards Under the Fair Labor Standards Act (FLSA), you are considered an exempt executive if : Your salary is at least $455 per week or $23,660 per year. In some states the wage may be higher. (In California, the minimum annual salary to be considered exempt is $33,280.)
In general, salaried employees are paid at a higher rate than hourly employees. Additional benefits of salaried work are that employees receive employment perks such as larger bonuses, benefits packages, retirement plans, and more paid vacation.
Exempt employees are required to use their PTO hours when they are absent from work for partial or full days . Further, even if absent for a full or partial day during a particular week, an employee is not required to use PTO for an absence in any week in which the employee works a total of more than 40 hours.
“Yes,” your employer can require you to work overtime and can fire you if you refuse , according to the Fair Labor Standards Act or FLSA (29 U.S.C. § 201 and following), the federal overtime law. The FLSA sets no limits on how many hours a day or week your employer can require you to work .