A Complete Guide to Salaried Employees in California

August 13th 2024

In California, salaried employees receive certain benefits and protections that differ from those of hourly workers. Employers in California need a thorough understanding of their responsibilities in payroll processing, determining overtime eligibility, providing benefits, and managing overall labor costs.

This article addresses key questions about salaried employees in California, providing a comprehensive guide to help employers and employees.

This Guide Covers

What is a Salaried Employee?

Salaried employees are workers who are paid a fixed salary regardless of the hours worked each week. Unlike hourly employees, whose pay is based on their actual hours worked, salaried employees receive the same amount of pay each pay period. In California, salaried employees often hold exempt positions, meaning they are exempt from certain wage and hour laws, such as overtime eligibility.

How Does Salary Pay Work?

Employers in California must pay salaried employees at least twice a month. The specific pay dates depend on the employee’s designation and the employer’s payroll schedule. Employers must provide itemized wage statements on every pay period. These statements must include the total hours worked, gross wages earned, deductions, net wages, the employee’s name, and the last four digits of their social security number or an employee identification number.

How Many Hours Do Salaried Employees Work in California?

In California, salaried employees typically work around 40 hours in a standard workweek. However, exempt employees often have more flexibility in their schedules due to the nature of their responsibilities and are not strictly required to work exactly 40 hours per week. In contrast, non-exempt salaried employees have set working hours, generally working eight hours per day and 40 hours per week. According to California labor laws, these non-exempt employees must be compensated for any overtime hours worked.

Are Salaried Employees in California Entitled to Overtime Pay?

In California, whether salaried employees are entitled to overtime pay depends on their classification as exempt or non-exempt.

  • Exempt Salaried Employees: Exempt salaried employees are not entitled to overtime pay. To qualify for exempt status, employees must meet specific criteria related to their job duties and be paid a salary that meets or exceeds the minimum threshold set by state law. As of 2024, California’s minimum salary for exempt employees is $1,280 weekly or $66,560 annually.
  • Non-Exempt Salaried Employees: Non-exempt salaried employees are entitled to overtime pay in California. They must be paid overtime at one and a half times their regular rate of pay for any hours worked beyond eight in a day or 40 in a workweek. In addition, they are entitled to double time for hours worked beyond 12 in a day and for the first eight hours of the seventh consecutive day of work in a workweek.

Employers must correctly classify employees as exempt or non-exempt based on their job duties and salary to ensure compliance with California labor laws.

Do Salaried Employees in California Get Work Benefits?

Yes, the benefits package provided to salaried employees is outlined in the employee’s employment contract. This package may vary based on factors such as full-time or part-time status, length of employment, and specific job roles. California employers must comply with state and federal laws regarding the provisions of certain benefits, such as health insurance, retirement plans, and paid time off (PTO).

Do Salaried Employees in California Get Paid If They Do Not Work?

In California, salaried employees receive their full salary for any workweek in which they perform any work, regardless of the number of days or hours worked. This means that even if salaried employees work only part of a workweek, they are entitled to their full weekly salary. However, there are exceptions to this rule. If a salaried employee is absent due to illness or disability and the employer has a bona fide sick leave policy or disability plan, the employer can deduct the employee’s salary for full-day absences. No deductions can be made for partial-day absences.

Learn more about California Leave Laws in our detailed guide.

What’s the Difference Between Salaried and Hourly Employees in California?

In California, the primary difference between salaried and hourly employees lies in their compensation structure and eligibility for overtime pay. Salaried employees receive a fixed salary and may be exempt from overtime laws, while hourly employees are paid based on the number of hours worked and are entitled to overtime pay for any hours worked beyond the standard workday or workweek.

In addition to compensation and overtime eligibility, other employment aspects distinguish the two types of employees:

Employment Aspect Salaried Employees Hourly Employees
Pay Structure Fixed annual salary; paid regularly twice a month Paid based on hours worked
Pay Rate Pre-determined, fixed amount Hourly wage rate

(California minimum wage rate: $16.00 per hour)
Overtime Eligibility Generally exempt from overtime laws unless considered non-exempt Entitled to overtime pay for hours worked over eight a day or 40 a week.
Work Schedule Follows a more consistent schedule of a standard 40 hours per workweek Often have variable hours and are paid for the actual hours worked 
Benefits Often receive more comprehensive benefit packages, including health insurance, retirement plans, paid time off, and other perks Benefits may vary; often less comprehensive
Job Duties Often hold managerial, professional, or administrative tasks Involves tasks that are more structured and defined by hours worked; their duties are often routine and may involve less decision-making authority

If you want to know more about the entitlements of employees in California, you can read our guides on Your Rights as a Salaried Employee in California and Your Rights as an Hourly Employee in California.

Which Should You Hire in California: Salaried or Hourly Employees?

The decision to hire salaried or hourly employees in California depends on your business needs and the nature of the job. Salaried positions are suited for roles requiring stability, higher levels of responsibility, and comprehensive benefits, while hourly positions are ideal for roles needing flexibility, clear task definition, and cost control.

Consider hiring salaried employees if:

  • The role requires a consistent, steady workload that does not vary significantly from week to week. Examples include managerial, administrative, and professional positions with continuous and ongoing responsibilities.
  • The position involves high levels of responsibility, decision-making, and independent judgment. Employees are expected to take initiative and manage projects without direct oversight.
  • The goal is to attract and retain employees for long-term employment. The position has a comprehensive benefits package, including insurance, retirement plans, and paid time off.

Consider hiring hourly employees if:

  • The workload fluctuates significantly, requiring flexible staffing levels to match demand.
  • The roles involve routine, repetitive tasks that do not require independent decision-making.
  • The position is temporary, seasonal, part-time, or only requires employees for specific projects or periods.
  • There is a need to control labor costs and pay employees only for hours worked without committing to higher fixed salaries.

Should You Track Salaried Employee Time in California?

Some might think tracking a salaried employee’s time is unnecessary as they are paid a fixed salary. However, tracking the time worked by salaried employees in California is advisable, especially for non-exempt salaried employees.

Time tracking is essential to maintain accurate records of all employees’ hours worked and wages paid. Non-exempt salaried employees are entitled to overtime pay for hours worked beyond eight in a day or 40 in a workweek and double pay for hours worked beyond 12 in a day or the first eight hours worked on the seventh consecutive day of work in a workweek. Additionally, California law mandates that employees receive meal and rest breaks. Therefore, time tracking for salaried employees ensures compliance with these overtime and break requirements.

Using a reliable time tracking system or software can streamline the process and ensure accuracy in recording hours worked, breaks taken, and overtime hours of salaried employees.

Learn more about California Labor Laws through our detailed guide.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.