from the HR Support Center
California Law Alert
December 16th, 2016 18:00
California Exempt Employee Minimum Salary Increase
On January 1, 2017, the minimum salary for exempt employees who work for employers with 26 or more employees is increasing from $41,600 to $43,680 per year.
Although the federal overtime rule changes are currently on hold, California’s state law – requiring that exempt employees make at least twice the state minimum wage on a monthly basis – is still in effect. Employers with 25 or fewer employees will not be subject to this increase in 2017, since the applicable minimum wage for their employees will remain $10.00 per hour.
In 2018, the minimum exempt employee salary that must be paid by employers with 26 or more employees will increase to $45,760 per year, and the minimum that by must be paid by employers of 25 or fewer employees will increase to $43,680 per year.
Given the yearly increases to the minimum salary for exempt employees in California, we recommend that you review pay rates with the coming years in mind. In preparation for the federal increase (now on hold indefinitely), we created an abundance of resources to help employers determine whether it makes more sense to increase employee pay to maintain the overtime exemption or to reclassify employees as non-exempt. These resources may be helpful to California employers making decisions about how to comply with state requirements. Use the HRSC search bar and type in “FLSA Changes” to check out what’s available.
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