State of Californina OT Laws

Under California employment law, salaried employees can be classified as exempt or non-exempt. ... Exempt salaried employees may not be eligible for overtime; however, employers have to pay salaried exempt employees at twice the minimum hourly wage based on a 40-hour workweek.

How much is the minimum salary for “white-collar” workers?

Exempt employees are not covered by most California wage and hour laws. However, in order to qualify as an exempt employee, an exempt employee must be paid a salary of no less than twice (2x) the California minimum wage based on a 40-hour workweek.

Exempt employees may include:

  • Independent contractors

  • White-collar workers

  • Unionized employees in certain industries

The largest group of exempt employees are generally known as “white-collar” workers, employed in administrative, managerial, executive, or professional capacities.17

In order to qualify as an exempt employee in California, the employee must meet the following tests:

  1. Be primarily engaged in executive, administrative or professional duties (generally, this requires the employee dedicate about 50% or more of his or her work time to these duties);

  2. Regularly and customarily exercise discretion and independent judgment on the job; and

  3. Earn a salary equivalent to at least twice the state minimum wage for full-time work (based on a 40-hour workweek).18

As of January 1, 2019, the minimum annual salary to qualify for an exempt employee would be $49,920 (Double the state minimum wage $12.00/hour for employers with 26 or more employees is $24.00/hour x 40 hours/week x 52 weeks = $49,920). For employers with 25 or fewer employees, the minimum annual salary would be $45,760.

The salary minimum for exempt workers is tied to the California minimum wage. Each year, on January 1st from 2017 and 2023, the minimum wage is set to increase. This will increase the minimum salary requirement for exempt workers each year, based on the following schedule:19

Year

Minimum Salary for Exempt White-Collar Workers at Employers with 26 or more employees

Minimum Salary for Exempt White-Collar Workers at Employers with 25 or fewer employees

2017

$43,680

$41,600

2018

$45,760

$43,680

2019

$49,920

$45,760

2020

$54,080

$49,920

2021

$58,240

$54,080

2022

$62,400

$58,240

2023

$66,560

$62,400

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