Compliance Watch:
What are my rights as a salaried employee in California?

April 12th 2024

Gaining a profound understanding of your rights as a salaried employee isn’t solely about legality; it’s a means to empower yourself for confident navigation of your professional path.

As you punch in day after day, the consistent compensation you receive shapes your role in the workplace. However, the complexities of these arrangements can vary greatly from one U.S. state to another.

This article is here to assist you, addressing the queries you’ve been curious about. We’ll explore the intricacies of your rights, guiding you toward a more informed and empowered work experience tailored to California’s specific regulations.

This Article Covers

Defining a Salaried Employee in California
Common Questions About Salaried Employee Rights in California
Understanding Exempt vs. Non-Exempt Status in California
Wage and Hour Regulations in California
Deductions, Benefits, and Protections in California
Taking Action Against Violations in California
Case Studies and Real-Life Scenarios of Salaried Employee Rights Violations in California

Defining a Salaried Employee in California

What is Salaried Employment 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.

What are the Key Differences Between Salaried and Hourly Employees in California?

Key Differences Salaried Employees Hourly Employees
Compensation Structure Receive fixed, predetermined pay regardless of hours worked Compensated based on actual hours worked
Time Tracking May not require strict hour-tracking Need to accurately track hours
Overtime Eligibility Generally exempt from overtime pay Eligible for overtime pay (typically 1.5 times regular hourly wage) beyond 40 hours/week. Additionally, the hourly rate may be doubled for hours worked beyond 12 hours in a workday.
Job Roles and Responsibilities Often higher-level roles May involve more routine tasks
Benefits and Protections May have access to broader benefits like health insurance, retirement plans, and paid time off Benefits packages may vary and could be less comprehensive
Flexibility Greater flexibility in work hours and remote work options Rigid schedules and less flexibility in choosing work hours

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

Common Questions About Salaried Employee Rights in California

What are the Basic Rights of Salaried Employees in California?

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.

Is Overtime Pay Applicable to Salaried Employees in California?

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.

Can Employers Deduct Wages from Salaried Employees in California?

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.

Are Salaried Employees Eligible for Breaks and Leaves in California?

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.

Can Salaried Employees Request Flexible Work Arrangements in California?

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:

Schedule Type Description
Alternate Work Week Schedule This schedule permits employees to work a consistent routine other than the standard 5 days per week, 8 hours per day.
Reduced Work Time Schedule A fixed work schedule that comprises less than 40 hours weekly. Compensation and leave benefits align with the employee’s time commitment.
Job Sharing This approach enables two employees to divide the duties of a full-time role, with joint responsibility for its success. Both receive proportional pay and leave accruals.
Flextime Employees can adapt their start and end times within the bounds of the employer’s core hours.
Telework This setup lets employees work away from their usual location for a set number of days, staying reachable via phone and email as per the agreed schedule.

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.

Understanding Exempt vs. Non-Exempt Status in California

Understanding the distinction between exempt and non-exempt status is crucial for salaried employees to navigate their rights and responsibilities effectively.

What is the Definition and Implications of Exempt Status in California?

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.

What are the Differences Between Exempt and Non-Exempt Salaried Employees in California?

Aspect Exempt Employees Nonexempt Employees
Legal Protections Exempt from certain wage and hour laws, lacking specific protections. Covered by wage and hour laws, entitled to comprehensive legal protections.
Entitlements Exempt employees are not entitled to overtime pay, meal breaks, or rest breaks. Nonexempt employees have rights to overtime pay, meal breaks, and rest breaks.
Minimum Wage Exempt employees aren’t guaranteed California’s minimum hourly wage; subject to salary requirements. Nonexempt employees receive at least California’s minimum hourly wage.
Overtime Compensation Exempt employees do not qualify for overtime pay. Nonexempt employees receive overtime pay at 1.5 times their regular rate for specific hours.
Meal and Rest Breaks Exempt employees are not mandated to have designated meal and rest breaks. Nonexempt employees are entitled to specified meal and rest breaks as per California labor laws.
Salary and Status Interaction Exempt status often necessitates a salary surpassing the minimum wage. Nonexempt status involves adherence to minimum wage laws and other legal protections.

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.

How to Determine if You're Exempt or Non-Exempt in California?

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.

Wage and Hour Regulations in California

What are the Minimum Wage Requirements for Salaried Employees in California?

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.

How is Overtime Compensated for Salaried Employees in California?

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?

Deductions, Benefits, and Protections in California

What are the Permissible Deductions from Salaried Employee Pay 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).

What are the Provided Employee Benefits and Protections Under California Law?

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.

Taking Action Against Violations in California

How to Report Violations to Authorities or Labor Departments in California?

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.

Case Studies and Real-Life Scenarios of Salaried Employee Rights Violations in California

Employee Misclassification: XPO resolves California worker categorization lawsuit for an amount close to $16 million

In this collective legal action, current and former delivery drivers accused XPO Logistics, a freight firm, of intentionally misclassifying them as independent contractors. This classification enabled the company to evade paying substantial amounts in overtime wages and other related benefits.

In this scenario, the employer had delivery drivers sign Delivery Service Agreements, outlining their status as independent contractors. Nonetheless, the court concluded that the level of control exerted by the company resembled that of employees rather than independent contractors.

Ultimately, the company chose to settle the lawsuit by agreeing to a $16.5 million payment to approximately 847 present and past delivery drivers involved in the litigation. Preliminary approval for this settlement was granted in June 2019 in a federal court in California.

Lessons learned from the case

  • The case underscores the potential risks associated with misclassifying workers as independent contractors to avoid providing benefits and overtime pay. Companies need to be cautious when determining employment status to avoid legal and financial repercussions.
  • The court’s decision highlights that employment classification isn’t solely determined by contractual agreements, but rather by the actual level of control exercised by the company over its workers. Companies should assess the nature of their relationships with workers and ensure they comply with proper classification guidelines.
  • It highlights the significant fact that the presence of a contractual arrangement between employers and their employees does not necessarily hinder a  favorable ruling for the employees. 

Wage Deduction: Correctional Sergeant Wage Reduced for Misconduct

In 2018, a correctional sergeant faced a notice of adverse action (NOAA), which resulted in a 10% salary reduction for two years. The Department of Corrections and Rehabilitation accused him of grave misconduct, including neglect of duty, discourteous treatment of subordinates, and misuse of authority.

Upon appeal, an administrative law judge ruled that while certain allegations were not proven, the correctional sergeant’s angry confrontation and use of profanity towards subordinates did violate department policies regarding respectful behavior. The State Personnel Board adopted this decision.

However, the California Court of Appeal for the Fourth District, Division Two, reversed this judgment. The court stated that the facts presented in the NOAA differed significantly from the findings of the administrative law judge. The NOAA alleged severe misconduct involving a cover-up and fostering corruption, while the judge’s findings focused on the sergeant’s failure to control his temper and treat subordinates respectfully during a confrontation.

As a result of this discrepancy, the appellate court directed the State Personnel Board to overturn its decision that upheld the department’s disciplinary action against the sergeant. This case underscores the importance of maintaining consistency between allegations and findings in matters involving employee misconduct.

Lessons learned from the case

  • Wage reductions can occur and be justified for various reasons including misconduct, employees should be aware of such actions and their consequences. 
  • The case underscores the significance of accurately detailing allegations of misconduct in disciplinary notices.
  • The case demonstrates that disciplinary actions should be proportionate to the proven misconduct.

Final Thoughts

Having a strong understanding of legal rights and protections is crucial for salaried workers. Familiarity with these rights empowers employees to avoid possible infringements and champion their welfare.

Remaining updated about shifts in labor regulations is vital for sustaining a positive workplace atmosphere. Due to the intricate nature of employment laws, seeking expert guidance, such as consulting an employment lawyer or contacting the U.S. Department of Labor, can offer invaluable advice and direction.

Important Cautionary Note

When making this guide we have tried to make it accurate but we do not give any guarantee that the information provided is correct or up-to-date. We therefore strongly advise you seek advice from qualified professionals before acting on any information provided in this guide. We do not accept any liability for any damages or risks incurred for use of this guide.