The California Definition of Exempt Employee

Small business tips - SandGarden Law GroupThe new CA minimum wage law changes the definition of “exempt employee”

Does your business employee salary workers who are exempt from overtime rules? Those workers are called exempt employees, and the definition of who is exempt is based on the minimum wage.

A worker must be making a yearly salary of at least twice the current minimum wage in order to qualify as an exempt employee. Because the minimum wage is changing, that will also affect the definition of which employees are exempt. This will be complicated and challenging for the next few years, because not only will the minimum wage change every year, but there will be a different minimum wage for smaller sized businesses (25 employees or fewer), than for larger businesses. So if you have any employees in the $40k to $50K range, you should make sure that they have not dropped below the exempt employee requirements. If your worker suddenly goes from exempt to non-exempt, you will have several new responsibilities and requirements to follow for the worker’s time and schedule.

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