The California Department of Industrial Relations oversees overtime, minimum wage, paycheck deduction, and leave and break laws for salaried employees in California. Application of these regulations typically depend on whether the employee is exempt or nonexempt. Exempt salaried employees in California do not have to be paid overtime if they work extra hours, while nonexempt salaried employees are eligible for overtime.
Exempt salaried employees in California generally work in an executive, administrative or professional capacity under minimum supervision. Examples of exempt jobs include those performed by program administrators, financial analysts and employees in managerial or supervisory roles. Nonexempt jobs usually are performed by employees who are closely supervised, such as customer service representatives, production workers and clerical employees. Employers may use the guidelines on the Department's website to determine whether a salaried employee is exempt. Exemption is based on actual job duties as defined by California law, not job titles.
Nonexempt Salaried Employees
A salaried employee who is not exempt from federal or California overtime pay provisions is nonexempt salaried and must receive overtime, in addition to salary, if he works overtime hours. Under California law, overtime pay is due for work hours exceeding eight and up to 12 in a day, and the initial eight hours worked on the seventh consecutive day of a workweek. Nonexempt salaried employees must receive double-time pay for work hours exceeding 12 in a day, and for hours exceeding eight on the seventh consecutive day of a workweek. Federal law generally requires overtime pay for work hours exceeding 40 in a week. When both federal and California law applies, the employer must use the higher standard.
Divide the annual salary by 52 weeks to arrive at the weekly salary when calculating overtime for a salaried employee. Then divide the weekly salary by the number of hours salary is based on for the week to get the regular hourly rate. Multiply the regular hourly rate by 1.5 to arrive at the overtime rate.
Exempt salaried employees subject to California law must be paid at least monthly at no less than twice the minimum hourly rate. Most other employees must receive wages at least semimonthly at no less than the state minimum hourly wage.
Leave Deductions for Exempt Workers
Generally, exempt employees in California must receive their full salary each week in which they perform any work. Salary may not be deducted for partial day absences. The employee must receive a full day's pay unless she took vacation, sick or personal leave but has exhausted her available time. In this case, if the employer has a valid leave policy, it may deduct leave taken in full day increments, but it cannot deduct for partial days taken. The employer may deduct time taken from the employee's leave bank, not salary, in hourly increments if this practice is in line with company policy.
Mandatory Sick Leave
Effective July 1, 2015, California employees have the right earn and use sick time if they have been working for an employer for at least 90 days and work at least 30 days in a year. Qualifying employees must accrue no less than one hour of paid sick time for each 30 hours of work. Exempt employees are presumed to work 40 hours in a week. If they work less than 40 hours, the amount of hours they worked applies.
Meal and Break Periods
Nonexempt salaried employees in California are entitled to unpaid, uninterrupted meal breaks of at least 30 minutes for every five-hour work shift. They also are eligible for paid rest breaks of at least 10 minutes for each four-hour work shift. Exempt salaried employees are excluded from California's meal and rest break laws.