SALARIED EMPLOYEES
This page provides general information on the exemption from overtime pay for certain salaried employees.
California law requires that most employees in California be paid at least minimum wage for all hours worked and overtime pay at time and one-half the regular rate of pay for all hours worked over 8 hours in a day or 40 hours in a workweek.
However, the IWC Wage Orders provide an exemption from overtime pay for certain salaried employees who meet certain tests regarding their job duties and who are paid a salary of at least $640 per week, which is equivalent to $2,773.33 per month or $33,280 per year
If you are an hourly employee, you are "non-exempt" and thus, entitled to overtime, meal and rest breaks, and itemized statements.
A common myth among employers is that a salary employee is automatically exempt and, thus, not entitled to overtime. This is simply not true. Under California law, a salaried employee must be paid overtime unless they "plainly and unmistakably" meet the test for one of the exemptions (Executive/Administrative/Professional/Outside sales), or unless they are specifically exempted from overtime by the provisions of one of the Industrial Welfare Commission Wage Orders regulating wages, hours and working conditions. (i.e. Taxicab drivers, caregivers)
How to Calculate Overtime- If you are paid a salary, calculate overtime as follows:
- Multiply the monthly salary by 12 (months) to get the annual salary.
- Divide the annual salary by 52 (weeks) to get the weekly salary.
- Divide the weekly salary by the number of legal maximum regular hours (40) to get the regular hourly rate
DID YOU KNOW:
- A salary means that the employee gets paid the same amount each pay period despite lack of work or poor work, attendance or disciplinary problems.
- If an employer deducts from an employee's "salary" for the quality or quantity of work performed, the employee is not salaried and not exempt.
- If you are paid a salary, the salary is for 40 hours of work (or less) per week
For more information about Salaried Employees see Opinion Letters from the California Division of Labor Standards Enforcement:
| Letter No. |
Description |
|
1988.03.28 |
(Wages: Calculation salary plus commissions) |
If you are paid a salary and work more than 8 hours in a day or 40 hours in a week, you may be entitled in thousands in overtime and other wages. Please call our office at (310) 277-2323 or contact us online for a free consultation
