Are my employees entitled to overtime?

An employee is considered exempt if two requirements are met: 1) the employee is on salary and 2) the duties of the employee fall under an exempt classification (such as the executive exemption).  As of January 1, 2016 the current minimum salary threshold in California is $41,600 – which is twice the state’s current minimum wage of $10 per hour.  However, be careful because certain cities in California have different minimum wages which exceed the California $10/per hour, such cities include Santa Monica and West Hollywood.  Additionally there are different minimum wages that the business must comply with if they employ more than 25 employees.

We recently had a case where the minimum wage increased, but the salary paid to a manager stayed the same – therefore qualifying him to be paid overtime.  The business owner did not realize that when the minimum wage increases, the minimum salary threshold also increases.  Therefore, the business owner owed the employee back overtime pay and payroll taxes.

If you aren’t sure whether your employee is exempt from receiving over time, email me at and I’ll send you a copy of the exempt classification requirements.

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