Department of Labor & Industries Announces 2021 Salary Thresholds. The minimum salary threshold is now $58,240 per year (or $1,120 per week) for employers with 26 or more employees and $54,080 per year (or $1,040 per week) for employers with 25 or fewer employees. California's Minimum Wages and Overtime Exempt Salary Thresholds Increase in 2021 SB 3, enacted in the 2015-2016 legislative session, sets forth a … Build a Morning News Brief: Easy, No Clutter, Free! A minimum wage increase is currently scheduled in Santa Clara, but until the effective date of 1/1/2022 the state minimum wage rate of $13.00 will apply. Bear in mind the state minimum wage impacts the salary threshold for exempt status. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $684* per week. In a memo issued on October 16, 2020 the California Department of Industrial Relations (DIR) increased the compensation threshold for exempt computer professionals by 2% over the 2020 rates. The Computer Professional exemption in California is very complicated and does not always follow the “logic” of the other exempt classifications. $58,240 per year (or $1,120 per week) for employers of 26 or more employees. California requires that exempt employees make at least twice the wages of a minimum wage employee for full-time employment. On January 1, 2021, the minimum salary threshold for exempt employees will increase to $43,004 for organizations with 50 or fewer 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% … Employees must meet certain duties tests in addition to their earnings or they will otherwise be eligible for … Click here to read more about how we use cookies. $54,080 per year (or $1,040 per week) for employers of 25 or fewer employees. Employers may use nondiscretionary bonuses and incentive payments (including commissions) paid on an annual or more frequent basis, to satisfy up to 10 percent of the standard salary level. To be considered "exempt," these employees must generally satisfy three tests: State Impact: Many states have their own salary and duties tests for determining whether an employee is exempt from overtime under state rules. “Using the 2021 minimum wage, L&I has calculated the salary thresholds taking effect Jan. 1, 2021: Small businesses (1-50 employees): An exempt employee must earn a salary of at least 1.5 times the minimum wage, or $821.40 a week ($42,712.80/year). As a result, the minimum salary required for the executive and administrative exemptions will increase on December 31, 2020 as follows: Note: There is also a professional exemption under state law. 2020 California Salary Increases for Exempt Employees. Employers should be sure to comply with both state and local minimum wage laws. In general, an employer may reduce an exempt worker’s salary, as long as the salary does not fall below the minimum salary requirement for exempt workers. For the professional exemption, employees must satisfy certain duties tests, but there is no minimum salary requirement under state law. In a memo issued on October 29, the California Department of Industrial Relations (DIR) increased the compensation threshold for exempt computer professionals by 2.5% over the 2019 rates. For organizations with 51 or more employees, the minimum salary threshold will be $50,180. *Determining which employers fall within the city and county of Los Angeles can be tricky. Law Firms: Be Strategic In Your COVID-19 Guidance... [GUIDANCE] On COVID-19 and Business Continuity Plans. Simply paying an employee a salary does not make them exempt, nor does it change any requirements for compliance with wage and hour laws. As a result of the change in the state's minimum wage, the minimum salary required for administrative, professional, and executive employees exemptions under state law will increase to $700.97 per week, or $36,450 per year on January 1, 2021. As a result of the change in the minimum wage for 2021, the minimum salary required for the states' administrative, professional, and executive exemptions will increase to $827.20 per week (or two times the minimum wage for a 40-hour week) on January 1, 2021. The minimum salary requirement for 2021 for white-collar workers is $54,080 for employers with 25 or fewer employees and $58,240 for employers with 26 or more employees. Crucial New California Employment Laws for 2021. 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. Increases in Minimum Salary … Effective January 1, 2021, the minimum salary threshold for these exemptions is as follows: $58,240 per year (or $1,120 per week) for employers of 26 or more employees. Compare your take home after tax and estimate your tax return online, great for single filers, married filing jointly, head of household and widower Posted on December 27, 2020 Posted in Uncategorized December 27, 2020 Posted in … On December 31, 2020, the minimum wage is increasing in every region except New York City. InsurTech Acquisitions Mark the Digital Age with a Bang: 3 Questions to Focus Your Agency’s Marketing Strategy The minimum wage changes on January 1, 2018. For the administrative, professional, and executive exemptions under state law, employers with 26 or more employees must pay a salary of at least $1,120 per week beginning January 1, 2021. The content on this blog is "as is" and carries no warranties. 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