Compliance Watch:

What are my rights as a salaried employee in California?

A salaried employee is an individual who receives a predetermined amount of money from their employer on a weekly, bi-weekly, or monthly basis, regardless of their weekly working hours.

In California, salaried employees are categorized as either exempt or nonexempt. The term “exempt” indicates that employers are not obligated to adhere to overtime regulations or minimum wage requirements for exempt workers. The determination of whether an employee falls under the exempt or nonexempt category hinges on the nature of their job, their earnings, and the method of payment they receive. Download U.S. FLSA Exemption Salary Threshold 2024 Poster now.

Read more about California labor laws with our guides on the rights of hourly employees and laws for salaried employees.

Here are some essential points to understand regarding salaries according to California employment law:

• As per the California Equal Pay Act, it’s unlawful for employers to offer lower salaries to employees of the opposite gender for performing the same job. Additionally, the Fair Pay Act extends these protections to cover equal pay regardless of race or ethnicity. 
• Salaried workers can be categorized as either exempt or non-exempt.
• Non-exempt salaried employees are eligible for overtime pay, while exempt salaried employees might not qualify for overtime.
• California employers are obligated to compensate exempt salaried employees at a rate that is at least double the minimum hourly wage, based on a 40-hour workweek.
• Starting from 2024, the minimum annual salary for an employee to be considered exempt is $66,560. This minimal salary threshold has been progressively rising over the past few years.
• The California minimum wage stands at $16 per hour as of 2024. However, many cities and counties in California have set higher minimum wage standards than the state requirement. Download U.S. Minimum Wage 2024 Poster now.
• California’s transparency regulations, specified in Senate Bill 1162, mandate numerous employers with 15 or more employees to disclose a salary range in their job listings. If you’re currently employed by such an organization, you have the right to ask for the pay range pertaining to your own position.

Yes, according to California labor law, specific situations may qualify salaried employees for overtime pay.

The FLSA dictates clear regulations regarding minimum wage and overtime payments for eligible salaried employees (i.e. non-exempt). For this reason, employers need to specify the anticipated weekly working hours for employees. According to California labor laws, non-exempt salaried employees are entitled to receive overtime compensation at a rate of 150% (1.5 times) of their regular pay for any hours worked beyond 8 hours in a workday, beyond a 40-hour workweek, or for hours worked on the seventh consecutive day of a workweek. This regulation holds for nearly all employees in California.

A common query often arises about whether employers can mandate a specific schedule for non-exempt employees and closely monitor their work hours. When a worker is categorized as non-exempt, employers are required to maintain thorough and accurate time records, with a focus on precise clock-based tracking. Occupations such as clerical employees, production workers, and service representatives, which generally involve nonexempt duties, are usually subject to close supervision. However, the actual exemption status hinges on the specific job functions, as defined by the labor laws of California.

Furthermore, any pre-filled time records indicating a consistent eight-hour workday each week might not be considered credible. This is because employees frequently work more than 8 hours daily, and the California Labor Commission (CLC) could potentially view such records as lacking validity.

Section 224 of the Labor Code explicitly bars any withdrawal from an employee’s pay unless it’s sanctioned either in a written agreement by the employee or allowed by law.

Any employer who chooses to take direct action assumes their own risk, as a neutral assessment is employed to ascertain whether the loss was a result of dishonesty, intentionality, or a notably careless act. Should an employer enact such a deduction and subsequent investigation reveal the employee’s innocence regarding dishonesty, intent, or gross negligence, the employee has the right to reclaim the withheld wage amount. Furthermore, suppose the employee is no longer employed by the deducting employer and their action is deemed unlawful. In that case, they might also have the opportunity to claim the waiting time penalty according to Labor Code Section 203.

Salaried workers who fall under the exempt category have the right to take meal breaks but are not entitled to rest breaks. Generally, three conditions need to be met for an employee to be classified as exempt:

• The salary should be at least double the state minimum wage for full-time work.
• The primary responsibilities should involve administrative, executive, or professional tasks.
• The duties must encompass the exercise of individual discretion and independent judgment.

In California, there are also exemptions in place for different sectors when it comes to meal and rest break regulations. These sectors include healthcare, construction, commercial drivers, union employees, public agencies, the motion picture industry, publicly-owned electric utilities, and security officers. This roster isn’t exhaustive, and the exemptions can be intricate.

If you’re uncertain about your employment status and your rights concerning meal and rest breaks, it’s recommended to seek advice from a knowledgeable employment attorney.

State agencies are actively encouraged to back adaptable work setups for their employees, as long as they align with both the department’s requirements and the employee’s needs. In line with most Memoranda of Understanding (MOU) and the overarching aim of enhancing Civil Service, flexible work arrangements present innovative strategies for accomplishing tasks while fostering a balance between professional and personal responsibilities.

Flexible work arrangements encompass innovative methods of accomplishing tasks through non-traditional timeframes, workweeks, and/or locations. These options can aid employees in harmonizing work commitments with personal obligations while simultaneously fulfilling business necessities and goals. Furthermore, state managers and supervisors can utilize flexible work arrangements as a means to bolster productivity, boost employee engagement, amplify job satisfaction, and diminish absenteeism. These same alternatives can also have a positive impact on recruitment and staff retention.

The following are succinct outlines of various adaptable work arrangements:

The primary criterion for evaluating the acceptance of a flexible work arrangement is its alignment with the department’s operational requirements. In cases where any aspect of this PML contradicts a section of an applicable MOU, the terms of the MOU will take precedence. Eligibility could differ for each choice, as certain options might not be suitable for particular job roles or certain employees, contingent upon the needs of the department. All requests should be handled fairly, without bias based on the employee’s motive for seeking flexibility.

For an employee to qualify as exempt, they must consistently receive the same regular pay or salary each week, regardless of their workload or hours worked. As of the current date, the minimum salary requirement for salaried workers to be considered exempt under the Fair Labor Standards Act is $684 per week or $35,568 per year. This marks an increase from the previous threshold of $455 per week or $23,660 per year. However, this increase might not significantly impact California, which already maintains a higher salary standard.

Starting January 1, 2024, California labor law mandates that employers with at least 26 employees must provide a weekly salary of $1,280 for exempt status. Similarly, for employees paid on an hourly basis to be considered exempt, the following conditions should be met:

• an hourly rate of $55.58 (for all hours worked)
• a monthly pay of  $9646.96, or
• a yearly income of $115,763.3.

Please remember that this table is a simplified summary of the differences between exempt and nonexempt employees in California. Actual situations can vary based on specific circumstances and applicable labor regulations.

In California, exempt employees are individuals who do not have coverage of wage and hour regulations. On the other hand, non-exempt employees are covered by these regulations, which grant them entitlements such as overtime compensation, a stipulated minimum wage, and designated periods for meals and rest. The determination of whether a worker qualifies as exempt is established by California labor law, rather than being at the discretion of the employer.

As of 2024, workers have the right to receive a minimum hourly wage of no less than $16. Consequently, the minimum monthly salary for exempt employees in 2024 stands at $5,546.67 (or an annual total of $66,560.00).

California’s minimum wage experiences annual increments on January 1st. Consequently, the minimum salary for exempt employees in California will also undergo annual growth.

California legislation mandates employers to compensate overtime, regardless of authorization, at a rate of one and a half times the usual wage for all hours worked beyond eight and up to twelve hours within a workday.

Similarly, this rule applies to the initial eight hours worked on the seventh consecutive day of labor within a workweek. Moreover, it stipulates that double the regular wage be paid for all hours exceeding twelve in any workday and for those surpassing eight hours on the seventh consecutive day of work in a workweek. Check out our guide on How to calculate overtime in California?

According to California regulations, an employer is permitted to lawfully subtract the subsequent items from an employee’s earnings, as outlined in California Labor Code Sections 221 and 224:

• Deductions that are obligatory under federal or state law, such as income taxes or garnishments.
• Deductions that the employee has provided written consent for can encompass insurance premiums, medical dues, or other deductions that do not diminish the employee’s actual wage.
• Deductions that have been sanctioned through a collective bargaining or wage agreement, specifically intended for health and welfare or pension contributions.

While wage garnishment falls within the scope of lawful wage deductions according to Labor Code section 224, it’s important to note that an employer cannot terminate an employee due to the threat of wage garnishment or the actual occurrence of wage garnishment stemming from a single judgment payment, as specified in Labor Code Section 2929(a).

The benefits and protections offered to employees under California law include, but are not limited to, the following: 

• Under Californian legislation, employers are barred from engaging in discrimination and reprisals against employees belonging to various protected groups. They are also obligated to grant pregnancy accommodations, ensure pay equity, permit wage discussions, offer personnel file access, and safeguard whistleblowers. 
• Pre-employment drug testing and background checks are allowed in California, although inquiries regarding salary history are restricted. 
• California enforces regulations concerning fundamental work conditions such as minimum wage, overtime, meal and rest breaks, breastfeeding breaks, and child labor. These aspects are covered in Wage and Hour.
• Employee compensation and benefits, encompassing temporary disability insurance, health care continuation, pay statements, wage deductions, and wage notice prerequisites, are governed by Californian laws. 
• Following Californian law, employees have entitlements to specific leaves or time off, encompassing bereavement leave, family and medical leave, paid family leave, paid sick leave, domestic violence leave, and emergency responder leave. Refer to Time Off and Leaves of Absence for comprehensive information.
• Employers in California are obligated to furnish a secure working environment for their employees, necessitating the creation of a written Injury and Illness Prevention Program. Smoking within workplaces and the usage of hand-held cell phones while driving are both prohibited. 
• Upon the termination of employment, California employers must adhere to pertinent final pay, job reference, and mass layoff notification requirements. For a comprehensive understanding of the procedures during organizational exits, refer to Organizational Exit.

Should you intend to report a widespread breach of labor law committed by your employer in California or a violation impacting numerous employees, the Labor Enforcement Task Force (LETF) may be contacted. 

To claim wages, you can file wage claims in California to the Labor Commissioner’s Office. Situations that might prompt a current or former employee to consider filing an individual wage claim encompass scenarios such as unpaid wages, including overtime, commissions, and bonuses, or receiving checks with insufficient funds.

Furthermore, instances like not receiving final paychecks, uncompensated vacation hours after the termination of employment, unauthorized paycheck deductions, and violations of meal and rest periods can warrant such claims.

If you’ve experienced workplace discrimination or retaliation, you may file a complaint regarding retaliation or discrimination in California to the Labor Commissioner’s Office 

In cases where you need to report a workplace health or safety issue, you can file a complaint about workplace health or safety to Cal/OSHA.