Beginning January 2016, employers who want to claim the salaried executive, administrative, or professional exemption under California law, must begin paying a guaranteed salary of at least

$3,467 per month (or $41,600 per year). The guaranteed salary for a claimed exemption must be equal to at least twice the applicable minimum wage, and because the California minimum wage

rises to $10 per hour in January, the guaranteed salary must equal at least $20 per hour, or $3,467 per month. Our review of local Minimum Wage Ordinances (established by Cities) does not show any of them attempt to impact the definition of an executive, administrative, or professional worker for whom a business may claim an overtime exemption.

To claim the overtime exemption starting in January 2016, employers will still have to ensure such workers

(a) spend a majority of their time in high-level exempt functions and

(b) receive a guaranteed (not subject to reduction) salary equal to at least $3,467 per month.

 

California businesses should check their payroll information for managers, supervisors, and other high level personnel, to ensure that where an overtime exemption is being claimed, the minimum

salary equals at least $3,467 per month or $41,600 per year.