Wage & Hour Issues

In California, properly classifying an employee as exempt from overtime and other wage protections requires more than just a job title. Employers must satisfy both:

1. The Duties Test: The employee performs primarily exempt executive, administrative, or professional functions.
2. The Salary Basis Test: The employee earns a fixed salary that is at least twice the minimum wage for full-time work (40 hours/week, 52 weeks/year).

Most employers know the salary basis test is tied to the state minimum wage, which in 2025 is $16.50/hour, meaning the minimum exempt salary is $68,640/year. However, if your employees work in a city or county with a higher local minimum wage, failing to account for that higher rate could cost you significantly.

Governor Newsom has signed into law SB 616, increasing the number of paid sick days that California employers will be required to provide their employees starting next year.

California has passed a number of new employment laws this year. These new laws, which go into effect on January 1^st, 2023, are expected to have a significant impact on employers operating in California. Below is a brief overview of the most notable new laws affecting California businesses.