Minimum Wage Requirements For Exempt Employees In California

California’s labor laws are designed to protect workers, but the rules for exempt and non-exempt employees are not the same. A key distinction lies in how minimum wage laws apply to exempt employees. Unlike non-exempt workers, exempt employees aren’t eligible for overtime pay, but they must still meet a minimum salary threshold to maintain their exempt status. This salary threshold is directly tied to California’s minimum wage, meaning that as the state’s minimum wage increases, so does the exempt employee minimum wage requirement.

What Makes an Employee Exempt?

To be considered an exempt employee in California, individuals must meet specific criteria that distinguish them from non-exempt workers who are entitled to overtime pay, meal breaks, and rest breaks. The most common exemptions apply to employees in executive, administrative, and professional roles. For these employees, exemption is determined based on both the nature of their job duties and their salary.

Exempt employees must be primarily engaged in duties that require independent judgment and discretion. In addition to job responsibilities, the salary component plays a role in determining exemption. California law requires that exempt employees earn a salary that is at least twice the state minimum wage for full-time work.

Current Minimum Wage Requirements for Exempt Employees

In 2024, California’s minimum wage increased to $16 per hour for employers with 26 or more employees and $15 per hour for employers with fewer than 26 employees. Because exempt employees must earn at least twice the minimum wage on a full-time basis, the minimum salary for exempt employees in 2024 is $64,480 per year for larger employers and $62,400 per year for smaller employers.

These salary thresholds ensure that exempt employees are compensated fairly for their work, even though they do not qualify for overtime pay. Employers must regularly evaluate their exempt employees’ compensation to ensure compliance with these requirements, especially when minimum wage increases.

What Happens If the Salary Requirement Isn’t Met?

If an employee’s salary falls below the required minimum, they cannot be classified as exempt, regardless of their job duties. This means they would be entitled to overtime pay, rest breaks, and other protections granted to non-exempt workers under California labor law. Employers must consistently meet the minimum salary threshold to maintain the exempt status of their employees.

Employees should also be aware of their rights. If you are classified as exempt but not receiving the proper salary, you may be entitled to back pay for overtime hours and other compensation. Misclassification of exempt employees can lead to serious legal consequences for employers, including lawsuits and penalties.

Exempt Employees and Benefits

While exempt employees do not receive overtime pay, they are entitled to other benefits, such as sick leave, paid time off, and health insurance, depending on company policies. They may have more flexible work hours and are often expected to complete their tasks without regard to the typical 40-hour workweek.

Being classified as exempt does not mean an employer can underpay an employee. The salary requirements linked to the state’s minimum wage are non-negotiable, and failing to meet them can result in an employee being reclassified as non-exempt.

Facing Wage Discrepancies? Defend Your Rights with Sirmabekian Law Firm

If you believe your employer is not meeting the minimum wage requirements, it’s important to take action. At Sirmabekian Law Firm, our attorneys have extensive experience in employment law and are committed to helping workers protect their rights.

Misclassification or failure to meet salary thresholds can result in lost compensation, and we’re here to ensure you receive what you’re entitled to under California law. Whether you need guidance on your exempt status or are facing wage issues, contact us today for a free consultation. Let us review your case and help you secure fair treatment.