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When does a salaried employee deserve overtime pay?

On Behalf of | Apr 15, 2024 | Wage & Hour Law

Many wage claims in California relate not to violations of minimum wage laws but rather overtime pay statutes. California has more assertive employee protections than many other states. The minimum wage per hour is higher, and there are more scenarios in which employees should receive overtime wages.

Especially when companies operate in other states in addition to California, employers could improperly apply federal rules when California state law should instead determine a worker’s wages. For example, sometimes workers paid on a salary basis are exempt from overtime pay. Other times, they are not. Regardless of what an employer says about a worker’s status, the amount they earn is generally what determines whether they are exempt from overtime pay or not.

What is the current threshold for exempt salaries?

The timing of the claim and the size of the employer are the two main considerations when determining if a worker is exempt from overtime laws or not. Just because a company negotiated salary pay arrangements with a worker does not automatically exempt them from overtime pay rights.

Especially if a company has 26 employees or more, a low salary or even a moderate salary might leave a company responsible for paying overtime wages. Generally, the minimum salary required to be exempt from overtime wages is twice what a minimum wage worker earns annually.

All employees in California should receive at least $16 per hour, which works out to a salary of $33,280 if someone works 40 hours per week for all 52 weeks of the year. Therefore, for a worker to be exempt from overtime requirements, they need to earn at least $66,560 that year. Changes in minimum wage rules that apply to healthcare workers and fast food workers could mean that a different salary threshold applies in certain professions.

If a worker is not clearly an exempt employee, then the company likely needs to reimburse them for overtime when they have worked long shifts, put in more than 40 hours per week or worked seven days in a row without a day off from their job.

Learning more about California’s wage and overtime laws is important for those not receiving the pay that they deserve. Workers who understand California employment statutes can hold employers accountable for violating their rights.