California’s Minimum Wage Law Affects Overtime Exemptions

Alarm clockMinimum-wage workers across California applauded the state’s new plan to increase the minimum wage over the next few years. While many workers are looking forward to an increase in their base pay, the new law will also affect which employees qualify for overtime.

Whether or not a worker qualifies for state-mandated overtime pay depends on his or her salary as well as his or her type of employment. In general, California law requires that non-exempt employees who work more than 8 hours per day or 40 hours in a week receive overtime pay at a rate of time 1.5 times their base pay. In order to be exempt from the overtime requirement, a salaried employee must work as an executive, licensed professional, or in administration.

An employee will only be exempt from overtime pay if he or she meets all of the requirements of a particular category. For most exempt workers, one of these requirements involves salary or pay. Usually, the employee must make at least two times the state minimum wage in order to be exempt from overtime.

Currently, the minimum wage is at $10 per hour, or $20,800 per year. In order for a person to be exempt from overtime, he or she must make at least $41,600 per year. As the minimum wage increases, so will the amount required to exempt an employee from overtime pay. By the time the minimum wage hits $15 per hour, an employee will have to make at least $62,400 to be considered exempt. Employers will need to begin paying more employees overtime (or increase their pay) as the minimum wage goes up.

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The increase in minimum wage will especially affect teachers. Teachers have their own exemption under California Labor Code section 515.8, and generally do not receive overtime pay. However, their exemption is also tied in to the state’s minimum wage. As a result, teachers will also need to earn at least twice the state’s minimum wage to be exempt from overtime. Many struggling school districts will likely be forced to either increase teacher pay or begin paying overtime to their educators.

In light of the increasing minimum wage, workers should review their salary and make sure that they are truly exempt from receiving overtime pay. If you do not make more than twice the state’s minimum wage, you may be owed overtime. Your employer could be liable to you for back wages, fines, and attorneys’ fees if he or she failed to follow California law. Contact us today to speak with an experienced wage lawyer in Sacramento.

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Labor Law Office, APC

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Sacramento, CA 95821

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2017-12-13T21:46:33+00:00 May 2nd, 2016|Wage and Hour|