To qualify for exemption, employees generally must be paid at not less than $684 * per week on a salary basis. Employers need to be careful about the salary calculation to ensure the employee is paid a sufficient salary that qualifies the employee as exempt. On September 24, 2019, the U.S. Department of Labor (DOL) issued its final overtime rule as it relates to the minimum salary threshold for exempt employees. For employers of 25 or fewer employees the minimum salary is $45,760.00 annually, $3,813.33 per month, or $880.00 per week. In 1943, the California legislature increased the state minimum wage from $0.33 to $0.45 per hour. Salary required to meet “white collar” exemption increases on January 1, 2019. According to California labor law for salary employees, employers are not permitted to reduce the salary of an exempt worker even if they only work fewer hours than the normal time. The court in Negri v. Koning & Associates set forth that in order to qualify as a “salary” the pay “must still be a predetermined amount that is not subject to reduction based upon the quantity or quality of work.”  Therefore, bonuses, commissions, and other payments made to the employee during the course of the year are usually not considered part of the employee’s salary to qualify as exempt. Starting with the City of San Diego, the minimum wage employers must pay to all employees increases to $12 per hour worked effective January 1, 2019. The employer attempted to argue that the plaintiff was an exempt employee under the administrative exemption. As of January 1, 2019, the minimum wage in California increased from $11.00 to $12.00 per hour for employers with 26 or more employees (the increase is from $10.50 per hour to $11.00 per hour for employers with 25 or fewer employees on January 1, 2019). New Salary Threshold for Employees Exempt from Overtime By Bran Noonan and Melissa A. Overbeck on March 10, 2019 Posted in Wage & Hour. 3. In the following states with 2019 rate changes, the 7(i)-type exemption requires … In California, the current minimum salary for most "white collar" exemptions (administrative, executive, professional) is $49,920 ($45,760 for employers with 25 or fewer employees). © 2020 THE MARA LAW FIRM PC. California employees who do not meet this minimum salary test cannot be classified as exempt. Salary increases required for exempt employees in 2019, Five Reminders About How California’s Increase In Minimum Wage On January 1, 2020 Impacts Exempt Employees, Department of Labor proposes higher salary level to qualify as an exempt employee: What California employers need to understand, Wage and hour audit considerations for California employers in 2019, Considerations for 2019 California minimum wage increase, Five huge misconceptions about California employment law. For employers with 25 or fewer employees, the minimum wage increased from $10.50 to $11.00 per hour. 1. Even if an employee meets all of the duties requirements for the exemption, he or she must still be paid the applicable minimum salary in order to be exempt from overtime. CALIFORNIA LAW ON SALARY REDUCTION. California’s minimum salary for 2019 is $49,920 (annualized) for businesses with at least 26 employees and $45,760 for those with fewer, and will increase to $54,080 and $49,920, respectively, as of Jan. 1, 2020. to $96,968.33. The minimum monthly salary exemption increases from $7,883.62 to $8,080.71. Please see “Authority” in the Explanatory Notes below for an explanation of the various exempt appointments. With the increase in the state minimum wage, there is a corresponding raise in the minimum salary required to qualify as exempt under the EAP exemptions. 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