FLSA Minimum Salary For Exempt Employees
Under the Fair Labor Standards Act (FLSA), employers must pay their exempt employees a minimum salary of $23,660 per year. If you want to pay your exempt employees less than the minimum salary, you can only do so if you meet one of the following conditions:
The employee earns at least $455 per week ($23,660 divided by 52 weeks in a year) and performs job duties that involve administrative work or professional services as described in the FLSA regulations.
The employee earns at least $913 per week ($47,476 divided by 52 weeks in a year) and performs job duties that involve executive or supervisory work as described in the FLSA regulations.
The employee earns at least $134,004 per year ($913 per week multiplied by 52 weeks multiplied by 12 months).
Flsa Minimum Salary For Exempt Employees
How does the California minimum wage affect my salary?
In California, the minimum salary for exempt employees is based on the applicable minimum hourly wage for non-exempt employees in the state. Exempt employees must be paid at least twice the minimum hourly wage for full-time employment.
Full-time employment is considered to be 40 hours per workweek.[4]
Calculating an exempt employee’s minimum salary level, then, depends on the current applicable minimum wage. The state minimum wage is scheduled to increase across California over the next few years. It also differs for large and small employers:
Effective Date Minimum Wage for Employers with 25 or Fewer Employees Minimum Wage for Employers with 26 or More Employees
January 1, 2020 $12.00 / hour $13.00 / hour
January 1, 2021 $13.00 / hour $14.00 / hour
January 1, 2022 $14.00 / hour $15.00 / hour
January 1, 2023 $15.50 / hour $15.50 / hour
Additionally, some counties have their own minimum wage laws that entitle workers in the county to higher wages. For example, as on January 1, 2022:
Berkeley’s minimum hourly rate is $16.32,[5]
Los Angeles’ rate is $15.00 per hour,[6] and
Emeryville’s minimum wage rate is $16.97 per hour.[7]
Because exempt employees are entitled to a minimum salary that is twice as high as the minimum hourly wage of nonexempt workers, the location and size of their employer can matter, as well as the date.
In January, 2022, an exempt employee at a small business with 25 or fewer workers in a county without its own minimum wage law is entitled to a salary level of at least $58,240. Exempt employees who work for larger businesses or in counties with their own minimum wage law will have a higher minimum salary threshold.
As you can see, exempt employees in California benefit from state employment laws that require a higher minimum salary than what would be required, under federal law. In some cases, the difference is quite significant.
Employee opening an envelope with a paycheck
Exempt workers in California must earn a salary at least twice the state’s minimum wage.
What is an exempt employee?
In California, an exempt employee is a white-collar worker who plainly and unmistakably:
is paid at least the minimum salary,
spends at least half of their time performing duties that consist of administrative, executive, or professional tasks, and
uses their discretion and independent judgment while performing these job duties.[8]
If an employee meets all of these requirements, they can be classified as an exempt employee. These employees are exempted from California labor laws that entitle them to:
overtime pay,
a minimum hourly wage, and
rest and meal breaks during overtime hours.[9]
Some specific jobs have their own rules regarding exemption. These include professional employees working as:
doctors and surgeons,
computer professionals,
outside salespeople,
private school teachers, and
commissioned employees making at least one and one-half the minimum wage and with more than half of their compensation coming from commissions.
The jobs may come with their own duties tests to determine a worker’s exempt status.
[1] 29 CFR 541.600(a). John Myers, California’s minimum wage will rise to $15.50, triggered by soaring inflation, Los Angeles Times (May 12, 2022).
[2] 29 CFR 541.600(a).
[3] Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Computer and Outside Sales Employees, 84 Fed. Reg. 51,306 (Sept. 27, 2019).
[4] California Labor Code 515(c) LAB.
[5] Berkeley Municipal Code 13.99.
[6] Los Angeles County Code Chapter 8.100 (effective July 1, 2021, all employers will be covered by a $15.00 minimum wage).
[7] Emeryville Municipal Code 5-31.05.
[8] California Labor Code 515(a) LAB and Nordquist v. McGraw-Hill Broadcasting Co., 32 Cal.App.4th 555 (1995).
[9] 8 California Code of Regulations 11040(1)(A).
Flsa Minimum Salary For Exempt Employees
