What You Need to Know About California Exempt Employee Laws
California considers employers working for any business exempt or nonexempt. Here’s everything you need to know about California exempt employee laws.
In California, individuals can become exempt employees if they meet the state requirements. Exempt employees earn a predetermined salary and do not receive hourly pay. Exempt employees do not qualify for overtime pay or salary modifications.
What are Exempt Employee Laws?
The Fair Labor Standards Act (FLSA) created exempt employee laws for employees receiving a salary from a company. Exempt employees may work for professional and administrative companies. Exempt employees do not receive hourly pay and do not legally qualify for minimum wage or overtime payment.
California Exempt Employee Laws
In California, exempt employees must meet state requirements and earn a salary. Exempt employees’ monthly salary must earn at least two times the state’s current full-time minimum wage.
Individuals in California can calculate whether their salary meets the requirement using the current state minimum wage amount. California’s current minimum wage in California is $15.00 per hour for workplaces with over twenty-six employees and $14.00 for workplaces with less than twenty-six employees.
Related: California Final Paycheck Laws: Explained
Legally, a full-time employee works forty hours per week. An employee can determine their monthly salary from their annual salary to determine if they earn at least two times a full-time minimum wage employee earns monthly.
California law may only consider employees exempt if they work in an administrative, executive, or professional position for a company. The employee must also use independent judgment throughout the job to qualify as an exempt employee.
California will determine whether an employee is exempt. The following California jobs require separate exemptions specific to the employee’s role:
- Surgeons
- Physicians
- Computer professionals
- Private school teachers
- Union employees
- Truck drivers
- Commissioned employees
- Independent salespersons
Exempt Employee Salary in California
An exempt employee’s salary must meet California state requirements. An employee’s company predetermines their salary. The employee cannot modify their salary based on hours worked and quality of work. Only employees receiving a salary can qualify as exempt employees.
Based on the current minimum wage in California, the minimum salary an employee must receive to become exempt is about $62,400 for companies with over twenty-six employees and about $58,240 for companies with less than twenty-six employees. The employee must also satisfy California’s other requirements to qualify for an exemption.
Related: Reasonable Accommodation in CA: Accessibility at Work
FAQs About California Exempt Employee Laws
Can a California company modify an employee’s salary for unprecedented absence?
In California, a company may modify an employee’s salary based on full-day absences. A company cannot modify an employee’s salary based on partial absences because California will no longer view the company as paying the employee on a salary.
What happens if California misclassifies an employee as exempt?
If an employee becomes misclassified as exempt, California will reconsider the employee as nonexempt. The employee may receive fines and back overtime for the incorrect compensation.
Contact Us
If you or a loved one would like to learn more about California Exempt Employee Laws, get your free consultation with one of our Employment Attorneys in California today!