If you have salaried workers, you may be impacted by the change, which raised the overtime salary threshold to $684 a week, or $35,568 per year.. Here’s an in-depth look at the new overtime rule for 2020, and a few steps on how to adapt. If you are not sure whether you are an exempt employee, please review our article explaining the difference between exempt and non-exempt employees in California. In most cases, employees must be paid a salary to qualify as an exempt employee. (a); Cal. But some teachers at private schools are exempt even if they don’t meet those requirements. As at the time of writing, the minimum salary requirement for exempt salaried workers, according to the Fair Labor Standards Act is $684 per week or $35,568 per annum – an increment from the $455 per week or $23,660 per year. 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. New Minimum Salary For Exempt Employees Takes Effect January 1, 2020. In calculating an employee’s salary for the purposes of the salary test for exempt employees, employers are permitted to deduct any unpaid vacation days or personal days that are taken by the employee.⁠21 Importantly, however, the deductions must reflect a full day of pay due to absence from work. Notably, California’s salary basis test for exempt employees is directly tied to the state’s minimum wage. Specifically, exempt employees must earn a fixed monthly salary of at least double the minimum wage for full-time employment. 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. Currently the minimum salary for a full time, exempt employee is $33,280 per year. Code of Regs., tit. 13, § 1200, et seq. (a) [“All wages, other than those mentioned in Section 201, 201.3, 202, 204.1, or 204.2, earned by any person in any employment are due and payable twice during each calendar month, on days designated in advance by the employer as the regular paydays.”].↥, Labor Code § 1182.12, subd. 2002.05.06 (May 6, 2002), available here (Opens in new window). On January 1, 2021, exempt employees of employers with 26 or more employees must earn at least $58,240 per year and exempt employees of employers with fewer than 26 employees must earn at least $54,080. Code of Regs., tit. § 541.602(b)(2). Thus, the salary level for exemption purposes for larger employers increased from the most recent $41,600 to $43,680 on January 1, 2017, and will increase with each subsequent increase, ultimately reaching $62,400. Salary level is one of three tests used to determine employee exempt status. There are many exceptions and caveats to the minimum salary requirement. (a)(2)(A)⁠–⁠(C).↥, Labor Code, § 515.5, subd. 8, § 11040 [providing that, for each exempted category, the employee must earn “a monthly salary equivalent to no less than two (2) times the state minimum wage for full-time employment”].↥, See Negri v. Koning & Associates (2013) 216 Cal.App.4th 392, 397 [“A salary is generally understood to be a fixed rate of pay as distinguished from an hourly wage.”]; 29 C.F.R. Employees who are paid an hourly wage are usually considered non-exempt.⁠9 (Although there are a number of job-specific exemptions that apply to certain types of hourly employees, like commissioned employees, outside salespersons, and computer professionals.). (3)(D).↥, Labor Code § 204.1 defines commissions as “compensation paid to any person for services rendered in the sale of such employer’s property or services and based proportionately upon the amount or value thereof.” (See also Areso v. CarMax, Inc. (2011) 195 Cal.App.4th 996, 1003.↥, See Labor Code, § 2751, subd. However, the exempt salary minimum alone does not classify an employee as exempt. Code Regs., tit. on January 2022. Code of Regs., tit. 8, § 11090 (3)(L).↥, Cal. As some of you may be aware, the California state minimum wage will increase annually until January 1, 2023. In June 2016, California legislature introduced and passed the law for phasing in statewide minimum wage increases that will ultimately reach $15 / hour by 2022 for larger employers and by 2023 for smaller employers. Have much impact on California that already has a higher salary scale until. Gas & Elec level needed for exempt employees also increased as of January 1, 2019 not an... Website, without more, does not classify an employee … increase in minimum salary for employees!, 2002 ), 11070, subds attorney-client relationship into two main categories: employees... Some teachers at private schools are exempt even if they are paid on a commission are! 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