Government websites showing the boundaries are available here, here, and here. Employers should review non-exempt employee … Under California law, the salary threshold is twice the minimum wage. For 2021, this means exempt employees must receive a minimum annual salary of $58,240 for employers with more than 26 employees, and $54,080 for employers with 25 employees or less. There has been overhaul of the California Family Rights Act (CFRA) which will have a monumental impact on many employers throughout the state. The 2021 thresholds for computer professionals who are paid by the hour have also changed . On January 1, 2021, California's statewide minimum wage will increase to $14 per hour for employers with 26 or more employees, and $13 per hour for employers with 25 or fewer employees. The minimum annual salary is based on the current state minimum wage, calculated as follows: (minimum wage x 2) x 2,080 hours. Introducing PRO ComplianceThe essential resource for in-house professionals. Named the “Innovative Law Firm of the Year” by the International Legal Technology Association, the firm’s commitment to client service and depth of expertise draws clients to Jackson Lewis for excellent value-driven legal advice. Reference Source: Article VII, section 4 of the California Constitution, Exempt Salary Schedule, GC sections 11550-11564, 19825.5 Updated: 9/14/2017 One Column Page Salary threshold implementation schedule Salary thresholds for overtime exempt workers are a multiplier of state minimum wage for a 40-hour workweek 2021 Salary thresholds Small businesses: $821.40/week ($42,712.80/year) These include mandatory child abuse reporting, expanded crime victim leave, and increased minimum wages and exempt employee salaries. Only one minimum wage rate applies. On January 1, 2021, California's statewide minimum wage will increase to $14 per hour for employers with 26 or more employees, and $13 per hour for employers with 25 or fewer employees. The California 2020 legislative session has closed, and employers should be preparing for 2021 by updating policies and procedures. In 2021, this will be set at $15.24. The Department of Industrial Relations maintains a list of occupations that may be considered exempt, which can be found here. The base salary must be fixed and recur each pay period without variance due to hours, quantity, or quality of work performed. Earn a monthly salary of at least twice the state minimum wage for full-time work. But note, as described below, some local ordinances have higher minimum wage than the state law and some local ordinances eliminate any distinction in minimum wage based on employer size. The base salary must be fixed and recur each pay period without variance due to hours, quantity, or quality of work performed. $58,240 per year (or $1,120 per week) for employers of 26 or more employees. The minimum rate for exempt computer software employees will increase to … California employers should take note of the following changes to state and local minimum wage laws—set to take effect on January 1, 2021—that will impact both nonexempt and exempt employees. Under California law, commissioned inside salespeople are exempted from the state's overtime laws if the employee earns more than 1.5 times the state minimum wage and more than half of the employee's compensation represents commission earnings. Keep a step ahead of your key competitors and benchmark against them. Please contact [email protected]. The applicable minimum wage currently depends on the size of the employer. Start preparing now for 2021! Exempt employee’s salaries must meet a certain threshold for the employees to be exempt under the executive, administrative, and professional exemptions. Where the salary threshold is not satisfied, the employer should consider whether to increase compensation to meet the salary threshold or reclassify the employee as nonexempt. I 2021 California Local Minimum Wage Ordinances. In order to qualify as an exempt employee in California in 2021, an employee working for a company with 26 or more employees must earn $1,120 per week, or $58,240 annually; an employee working for a company with fewer than 26 employees must earn $1,040 per week, or $54,080 annually, exclusive of board, lodging, and other facilities. As mentioned above, California law requires exempt employees to be paid a monthly salary of at least twice the state minimum wage for full-time employment to qualify as exempt. If you would like to learn how Lexology can drive your content marketing strategy forward, please email [email protected]. There are 4 California employee exemptions, including an executive exemption.. California Supreme Court to Hear Oral Arguments on Retroactive Application of Dynamex, Governor Signs Legislation Extending Exemption from Rest Period Requirements for Safety-Sensitive Employees at Petroleum Facilities, In Case You Missed…California Legislative Changes Coming in 2021. Become your target audience’s go-to resource for today’s hottest topics. Exempt employees in California generally must earn a minimum monthly salary of no less than two times the state minimum wage for full time employment. The table below shows the federal General Schedule Base Payscale factoring in next-year's expected 2.6% across-the-board raise. Employers should review non-exempt employee wages and make appropriate adjustments to ensure compliance for 2021. Thus, in order to maintain their exempt status, commissioned inside salespeople will need to earn more than $21 per hour (26 or more employees) or $19.50 per hour (1-25 employees). In addition to California's statewide minimum wage increase, many cities and counties have enacted their own minimum wage ordinances that exceed state requirements. CA minimum wage will increase in 2021 to $14.00 for employers with 26+ employees, and to $13.00 for employers with 25 employees or less. ** Hayward and San Carlos will impose new minimum wages as of January 1, 2021 In 2016, California enacted legislation setting forth gradual increases in the minimum wage until 2023; the minimum wage in California will continue to rise each year on a statewide basis until it reaches $15.00 per hour. This month the Department released the salary requirements for Computer Software Employees, Physicians, and Surgeons. A new year means new changes to California's minimum wage laws. Exempt comput er employees may be paid at least $684 * on a salary basis or on an hourly basis at a rate not less than $27.63 an hour. Updated COVID-19 Quarantine Guidance for the Golden State, California Supreme Court Cases Employers Should Watch In 2021, Here We Go Again: California Employers Face Third Round of Stay-at-Home Orders. 2021 California Salary Increases for Exempt Employees. In accordance with Labor Code Section 515.5 (a) (4), the department has adjusted the computer software employee's minimum hourly rate of pay exemption from $46.55 to $47.48, the minimum monthly salary exemption from $8,080.71 to $8,242.32, and the minimum annual salary exemption from $96,968.33 to $98,907.70 effective January 1, 2021, reflecting the 2.0% increase in the California Consumer Price … is a law firm with more than 900 attorneys in major cities nationwide serving clients across a wide range of practices and industries. AB 25 – One-Year Exemption for Certain Applicant- and Employee-Related Data under the California … The California Department of Industrial Relations (DIR) has announced the 2021 rates changes for the computer software employee exemption and the licensed physician and surgeon exemption.These new rates take effect on January 1, 2021. Employers should review compensation for exempt employees to ensure that the applicable salary threshold is satisfied. Unlike some states, California does not allow employers to take tip credits, and so there is no separate tipped minimum wage. *As of July 1, 2021, the City of Los Angeles will make no distinction between smaller or midsize businesses. 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