Salaried workers are those who receive a predetermined, fixed payment regularly, whether it’s weekly or on a less frequent basis. These employees are bound by specific rules that control their work circumstances.
The aim of this article is to provide a summary of the pertinent rules and regulations that outline the obligations and privileges of both salaried employees and their employers in California. It will cover multiple factors, including payment protocols, breaks and leave allowances, and the classification of employees as exempt or non-exempt.
This article covers:
- Payment of Wages for Salaried Employees in California
- Salaried Employees Eligibility for Overtime for California
- Pay for Working Overtime for California Salaried Employees
- Exceptions to Overtime Exemptions for California Salaried Employees
- Violation of Salaried Employees Wages Payment in California
- Male and Female Salaried Employees in California
- Leave Entitlements for Salaried Employees in California
- Break Entitlements for Salaried Employees in California
- Deductions from Exempt Employees’ Salary in California
- Termination of Employment for Salaried Employees in California
As per California regulations, employers are typically obligated to compensate their employees at least two times a month, on designated paydays. Employers must ensure transparent communication with their workforce regarding the timing, location, and manner of payment. Furthermore, distinct timelines govern the disbursement of wages earned during specific pay periods, as detailed in the subsequent table.
|Between the 1st and 15th (inclusive) of any calendar month
|No later than the 26th of the same month
|Between the 16th and the last day (inclusive) of any month
|No later than the 10th of the following month
|Other payroll periods (weekly, biweekly, semimonthly)
|Within 7 days of the end of the pay period
|No later than the next regularly scheduled payday
To ensure precise and consistent payment processes that meet deadlines, employers frequently rely on tracking payroll hours and establishing procedures for managing pay periods and approval processes.
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In California, merely providing employees with a fixed salary doesn’t inherently exempt them from receiving overtime compensation. For exemption, employees must earn a monthly salary equivalent to at least twice the state’s minimum wage for full-time workers.
These criteria aren’t the sole determinants for exemption, as job responsibilities and salary basis tests also play a role. Nevertheless, salaried employees who are classified as non-exempt (thus eligible for overtime pay) must receive appropriate overtime compensation.
According to California regulations, non-exempt salaried workers are eligible to receive 1.5 times their standard pay for any hours worked beyond 8 hours in a day, 40 hours in a week, or on the seventh consecutive working day of a week.
To ascertain the overtime rate for salaried employees, you should follow these steps:
- Calculate the annual salary by multiplying the monthly income by 12 (months).
- Then, compute the weekly salary by dividing the yearly income by 52 (weeks).
- Once the weekly salary is determined, divide it by the legal maximum regular hours (40).
Learn more about California Overtime Laws.
In California, overtime calculation involves exceptions to the standard state regulations, which are applicable in situations where these standards do not apply. These exceptions are termed “overtime exceptions,” and they are pertinent to various categories of employees, including those on alternative workweek schedules, health industry employees following such schedules, hospital and care center employees with on-site patients, camp counselors, personal attendants of nonprofit organizations, resident managers in retirement homes with fewer than eight beds, employees providing 24-hour residential care for minors, ambulance drivers or attendants, employees in ski establishments, and live-in employees. For an exhaustive list of the affected employee categories and the specific regulations relevant to each, it is advisable to refer to the official website of the California Department of Industrial Relations.
Additionally, there are exemptions to overtime regulations applicable to employees and job roles where these provisions do not necessarily apply. Examples of employee categories falling under these exemptions include executive, administrative, and professional employees; employees in the computer software industry; employees of the State and its political subdivisions; outside salespersons; individuals who are the spouse, child, or parent of the employer; drivers; taxicab drivers; and airline employees. For comprehensive details on exemptions from overtime laws and the potential impact on the mentioned employee categories, we encourage you to consult the relevant government website.
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Assembly Bill 673, enacted into law by the Governor in 2019 in California, brought amendments to Labor Code section 210. This adjustment now permits employees to seek statutory penalties for delayed wage payment while they are still employed. This late payment penalty encompasses various types of wages that haven’t been paid promptly, such as minimum wage, overtime wages, or vacation wages.
Earlier, Labor Code section 210 solely allowed the recovery of civil penalties payable to the State through a civil action, including actions under the Private Attorneys General Act (PAGA). Although the section maintains the provision for civil penalties going to the State, it now includes a provision allowing employees to recover the entire penalty for themselves through the Labor Commissioner’s wage claim procedure.
For a first violation, the penalty amounts to one hundred dollars ($100) for each instance of failing to pay each employee. For subsequent violations or instances of willful/intentional violations, the penalty is raised to two hundred dollars ($200) for each failure to pay each employee, in addition to 25% of the unlawfully withheld wages.
A higher penalty for subsequent violations is applicable once an employer has been notified of a prior violation, regardless of whether penalties were actually imposed.
For many years, the California Equal Pay Act has prohibited employers from paying opposite-sex employees less for equivalent work. In 2015, the California Fair Pay Act was signed, strengthening the Equal Pay Act.
Key updates include that the Act mandates equal pay for employees engaged in “substantially similar work” based on skill, effort, and responsibility. It removes the requirement of having the employees work at the same establishment to be compared. It also heightens the difficulty for employers to justify pay disparities using the “bona fide factor other than sex” defense. The Act ensures that any legitimate factors justifying pay differences are applied reasonably and encompass the entire pay gap.
Furthermore, it explicitly labels retaliation against employees enforcing the law as unlawful and forbids employers from preventing employees from discussing or inquiring about their colleagues’ salaries. Additionally, the Act extends the duration for which employers must retain wage and employment-related records, from two years to three years.
Salaried employees are entitled to various types of leave to address different needs. The Family and Medical Leave Act (FMLA) provides up to 12 weeks of unpaid, job-protected leave annually for situations such as caring for family members or personal health concerns. Sick leave is mandatory for employees with over 30 days of work, accruing at one hour per 30 hours worked, capped at 48 hours.
While time off for jury duty is typically unpaid, employers must provide it. Similarly, employees are granted at least 2 hours of unpaid time off for voting with a 3-day notice. Victims of domestic violence or sexual assault can take time off for protection or medical care. Emergency response roles qualify for unpaid leave, while organ and bone donation leave extends to 60 days per year, with the initial 30 days paid. Unpaid leave is also available for school-related matters and meetings.
Military leave covers active service members during deployment, with the same job conditions on their return, while the National Guard, Naval Militia, and military reserve members also receive unpaid leave. Finally, military spouses are entitled to unpaid leave during a service member’s deployment. These leave provisions ensure that salaried employees have support in various life circumstances.
In California, workers enjoy a ten-minute paid break for every four hours worked and an additional rest period if their work exceeds two hours within a four-hour span. Employers are obligated to provide designated resting areas for employees, separate from restrooms, and ensure their accessibility during work hours.
Regarding California’s meal break regulations, employees are entitled to a 30-minute meal break after five consecutive work hours. Yet, this break can be waived for those working fewer than six hours or with mutual agreement. For those working over 10 hours, a second 30-minute meal break is required, given the total hours exceed 12 and both parties agree. Should an employee be engaged in duties during their meal break or remain on-site, the entire time should be compensated.
Employers are legally bound to offer meal breaks in California, and failure to do so results in a meal penalty of one extra hour’s pay per missed break. Some exceptions apply to resting periods, such as occupations involving less than three and a half hours of work in a day, residential care facility workers, strenuous activity performers, construction workers with staggered rest periods, and overnight rest requirements for crew members on commercial fishing boats.
An employer is permitted to withhold sums from an employee’s wages solely in situations when required or empowered by state or federal law, when a deduction is explicitly approved in writing by the employee to cover insurance premiums, benefit plan contributions, or other non-wage rebate deductions, and when a deduction for health, welfare, or pension contributions is explicitly authorized by a wage or collective bargaining agreement as per California Labor Code Sections 221 and 224. Although a wage garnishment aligns with lawful wage deductions, the employer cannot terminate an employee due to the threat of garnishment or if the employee’s wages are garnished for a single judgment payment. While salaried employees typically do not monitor their attendance, there are situations where such time and attendance tracking can prove beneficial.
It must be noted that the employer’s capacity to deduct sums from an employee’s wages due to cash shortages, breakage, or equipment loss is specifically governed by Industrial Welfare Commission Orders and limited by court judgments. Furthermore, various court rulings have substantially curtailed an employer’s ability to offset an employee’s wages.
In California, both employers and employees operate within an “at-will” employment framework. This indicates that either party can terminate the employment relationship without the need for a specific reason. Nevertheless, California has specific regulations pertaining to employment termination, including prompt final paycheck provision and the recent enactment of the mass layoff notification act, as follows:
In the event of employment termination in California, if an employee has provided a 72-hour notice of termination, the employer must promptly issue the final wage. If the employee provides less than 72 hours notice, the final wage should be paid within 72 hours of termination. Any accrued vacation time should also be compensated.
For situations involving plant closures or mass layoffs, California mandates that employers with 75 or more employees give a minimum of 60 days’ notice to affected employees and local representatives. This requirement applies to employees who have completed at least six months of work in the preceding 12 months. The WARN Act further necessitates notice when there are 50 or more employees facing layoffs, plant closure, or relocation within 30 days.
Learn more about California Labor Laws through our detailed guide.
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.