Schwartz, Steinsapir, Dohrmann & Sommers

California’s Rising Salary Threshold for Overtime


There is a lesser known benefit of California’s increasing minimum wage – more salaried workers now qualify for overtime.

Under California law, exempt employees (those ineligible for overtime) must earn a salary of at least double the state minimum wage for full-time employment.[1]  So as the minimum wage rises, so does the salary threshold for who gets overtime pay. Overtime pay in California is 1.5 times an employee’s regular rate of pay for all hours worked over 8 hours in one day or over 40 hours in a week.[2]

The below chart lists the weekly, monthly, and annual minimum salaries a California employee must be paid in order to be exempt from overtime pay:

 

Year Minimum Wage Weekly Monthly Annually
2016 $10.00 $800 $3,466.67 $41,600
2017 $10.50 $840 $3,640 $43,680
2018 $11.00 $880 $3,813.33 $45,760
2019 $12.00 $960 $4,160 $49,920

*Employers with 25 or fewer employees have an extra year to comply with each increase.

An employee who earns above the minimum salary may also be owed overtime, if they are “primarily engaged” in certain nonexempt duties.

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[1] Cal. Labor Code § 515(a); California Industrial Wage Orders Nos. 1-17

[2] Cal. Labor Code § 510(a). One and a half pay is also required for the first 8 hours worked on a seventh consecutive day of work. Double pay is required for each hour worked over twelve in a single day and each hour worked over eight on the seventh consecutive day of work. Cal. Lab. Code § 510(a)