Under California salary laws, employees can be classified as either exempt or nonexempt. Their status affects their eligibility to earn minimum wage and overtime. Generally, nonexempt employees have many rights that exempt employees do not.
Exempt and Nonexempt Employees
In California, “exempt employees” are employees who are exempt from the state’s wage and hour laws, such as independent contractors, white-collar workers (i.e., workers employed in administrative, managerial, executive or professional capacities), and unionized employees in specific industries. To qualify as an exempt employee, the employee must earn a minimum salary equivalent to twice the state minimum wage, based on a 40-hour workweek.
As of January 1, 2020, the minimum annual salary to qualify for an exempt employee became $54,080 (this is worked out by doubling the state minimum wage of $13 per hour (for employers with 26 or more employees), which is $26 per hour, then multiplying it by 40 (hours per week), then multiplying it by 52 (weeks per year). For employers with 25 or fewer employees, the minimum annual salary as of January 1, 2020 is $49,920.
Some nonexempt employees may also be paid a salary, which must not be less than the state minimum wage. Salaried nonexempt employees are also protected by California wage and hour laws, including overtime laws and laws concerning meal and rest breaks.
California Salary Laws: Minimum Wage
A salaried employee should be paid no less than the number of hours worked at the California minimum wage. For instance, an employee who works a full-time job at 40 hours per week should earn a minimum salary of $480 per week (or $24,960 per year).
If a California employer violates minimum wage laws, the employee can recover the money she is owed in a wage and hour lawsuit or a wage and hour class action lawsuit.
Read More: California Labor Laws
California Minimum Wage Increases
Under 2019 California salary laws, the statewide minimum wage is $12 per hour for employers with 26 or more employees, or $11 per hour for employers with 25 or fewer employees. In 2020, it increased to $13 per hour, or $12 per hour for employers with 25 or fewer employees.
The minimum wage will increase every year through the year 2023. As of 2021, the minimum wage for employers with 25 or fewer employees rises to $13 per hour, and for employers with 26 or more employees, it’s $14 per hour. In 2022, minimum wage is set at $14 per hour and $15 per hour, respectively. In 2023, the hourly rates rise to $15 per hour and $16 per hour.
Many cities and counties in California have a minimum wage higher than the state minimum. For example, in 2019, the minimum wage in Los Angeles County was $14.25 per hour, or $13.25 per hour for employers with 25 or fewer employees.
Employee Salary Reductions
Generally, an employer can reduce an employee’s salary for any lawful reason. No specific California labor law exists to prohibit him from doing this. However, an employer cannot reduce an employee’s salary to an amount below the current minimum wage.
California Salary Laws: Overtime
In California, nonexempt salaried employees are eligible for overtime. Exempt salaried employees may not be eligible for overtime, but employers have to pay exempt salaried employees twice the minimum hourly wage, based on working a 40-hour week.
A nonexempt salaried employee who works over the maximum number of hours should be paid based on California overtime laws. An employer cannot ask a nonexempt salaried employee to work more than the maximum hours without providing overtime pay.
Under California’s overtime law, employers are required to pay nonexempt employees 1.5 times their regular hourly rate of pay for:
- All hours worked in excess of eight hours in a single working day.
- All hours worked in excess of 40 hours in a single workweek.
- The first eight hours worked on the seventh consecutive day of work in the workweek.
Nonexempt employees must be paid two times their regular hourly rate of pay for:
- All hours worked in excess of 12 in a single workday.
- All hours worked in excess of eight hours on the seventh consecutive day of work in the working week.
California Meal Break Rights
Most employees in California (including most exempt employees) are entitled to an unpaid, 30-minute meal break if they work more than five hours in a day. A second meal break is required if their working day is more than 10 hours long.
If they do not work more than six hours in a day, employees can agree to waive the first meal break. Provided the first meal break was not waived, they can agree to waive the second meal break if they do not work more than 12 hours in a day.
During the meal break, the employee is relieved of all the responsibilities of his employment and is free to leave the work premises for the entire break period. If the employee is required to remain on the work premises or site, he must be paid for the meal break.
Additional Pay to Employee if Meal Break not Provided
When employers fail to provide an employee a meal break, they are required to pay the employee an extra one hour of pay at the employee’s regular hourly rate. The employee may only earn one extra hour per working day for his employer’s failure to provide him with missed meal breaks.
California Rest Break Rights
Nonexempt employees in California are also entitled to take a paid 10-minute rest period during the middle of each four-hour work period. However, employees are not entitled to a rest period if they work less than 3.5 hours in the workday.
When employers fail to provide an employee a rest period, they are required to pay the employee an extra one hour of pay at the employee’s regular hourly rate. The employee may only earn one extra hour per working day for her employer’s failure to provide her with a rest period.
Employers must also provide “reasonable” breaks for nursing mothers who want to express breast milk for their children. In other words, there are no strict time limits. Lactation breaks must be paid if they are taken during the employee’s regular rest period. However, they do not need to be paid if they last longer than, or are taken as well as, the regular rest period.
California Equal Pay Act
Under the California Equal Pay Act, employers must pay the same salary to employees of the opposite sex who perform similar work. An employer is prohibited from paying men and women different salaries for similar work unless the employer can show that the difference in pay is based on a seniority system; a merit system; a system that measures earnings by quantity or quality of production; or another bona fide factor besides sex, such as education, experience or training.
The Equal Pay Act also protects employees who ask about another employee’s wages or disclose their own wage or salary. An employer is prohibited from discriminating against an employee for disclosing the employee’s own wages, discussing the wages of others or encouraging other employees to rely on their equal pay rights.
The Fair Pay Act, enacted in 2016, strengthened the Equal Pay Act to provide protections for equal pay based on race or ethnicity.
- Los Angeles County: Honest Work, Fair Pay
- California Legislative Information: Labor Code CHAPTER 1. Wages, Hours and Working Conditions [1171 - 1206]
- State of California Department of Industrial Relations: California Equal Pay Act
- California Employers Association: CEA Presents: Guide to California's Equal Pay Laws
- California Legislative Information: Labor Code CHAPTER 1. Section 510
- California Legislative Information: Labor Code CHAPTER 1. Section 511
- California Legislative Information: California Labor Code Section 512
- California Legislative Information: Labor Code Section 226
- Thomson Reuters Westlaw: California Code of Regulations 11040 Order Regulating Wages, Hours, and Working Conditions in Professional, Technical, Clerical, Mechanical, and Similar Occupations.
- California Legislative Information: Labor Code CHAPTER 3.8. Lactation Accommodation [1030 - 1033]