Salary Requirements California: Minimum Pay, Exempt Status, and Overtime Rules

California salary requirements cover minimum pay, exempt status, overtime rules, and equal pay standards for salaried and non-exempt workers. This article explains minimum wage levels, exemption thresholds, local wage differences, pay cuts, and legal claims under California labor laws.

By Douglas Wade, Attorney

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Table of Contents

1. Introduction

2. Salary requirements in California: The Legislation

3. Minimum Wage

4. White-collar employees

5. Equal Pay

6. Pay Cuts

7. Labor Violation Lawsuits

8. Conclusion

Introduction

Exempt & non-exempt are two types of salaried employees in California. Non-exempt salaried workers are entitled to overtime. Exempt salaried workers may not be qualified for overtime. A lot of this ties back to the broader salary requirements in California.

Here are three important facts to know regarding compensation according to California labor laws:

California firms are required to pay salaried workers at least double the minimum hourly rate (workweek of forty hours).
The state’s minimum salary is $16.50 per hour (2025). Many California counties and cities have greater minimum wage standards.
Furthermore, the minimum yearly wage required for an exempt worker is $68,640.

Salary requirements in California: The Legislation

California wage & hour rules affect salaried & non-salaried employees. Non-exempt salaried workers are safeguarded by California’s minimum salary regulations. For exempt workers, there is a minimum wage obligation as well.

1. Exempt employee definition

“Exempt employees” refer to workers who are not subject to California’s wage & hour regulations. Nonetheless, to be considered an exempt worker, the individual must:

Have main responsibilities that include executive, professional, or administrative activities,
Have responsibilities that necessitate the use of discretion & independent judgment, and
Receive a minimum income equal to two times the state’s minimum wage, calculated on a forty-hour workweek.

Be aware that several job-related overtime exemptions in California’s wage orders pertain to specific professions, including outside salespeople, commissioned workers, commercial drivers, & live-in maids. The responsibilities, compensation framework, and regulations regarding overtime may differ.

Additionally, certain unionized workers are eligible for exceptions from overtime regulations due to specific collective bargaining contracts that offer premium overtime payment rates and base wages at least thirty percent greater than the minimum wage. The contract should clearly specify wages, hours, & working conditions.

2. Salary does not always indicate exempt status

The majority of non-exempt employees receive hourly wages, but they can also earn a salary provided it does not fall below the state’s minimum wage. Similar to non-exempt (hourly) workers, salaried employees (non-exempt) are safeguarded by California wage & hour regulations, encompassing:

Overtime regulations, and
Regulations mandating meal & rest periods

3. Equal compensation, fair pay, & transparency

Under the California equivalent Pay Act, businesses may not pay a lesser salary to staff members of the opposite sex for equivalent work. The Fair Pay Act additionally offers safeguards for fair wages with regard to race and ethnicity.

Keep in mind that many firms with more than fifteen staff members are required by California’s pay openness regulations, according to Senate Bill 1162, to mention a compensation range in their employment postings. If you currently work there, you may ask for a wage range for your particular position. There is a growing push for transparency tied to the salary requirements in California.

Minimum Wage

Non-exempt workers are safeguarded by California’s minimum wage legislation, even if they receive regular pay. Employers are prohibited by law from underpaying workers the minimum wage. You can reclaim the sum of cash (lost wages) you are entitled to in:

A wage & hour lawsuit, or
A wage & hour class action lawsuit.

1. Minimum Wage

The state’s minimum salary (2025) = $16.50 an hour.

A salaried employee shall be paid not lower than the total number of hours completed at the state’s minimum wage level. For people doing full-time employment at forty hours a week, the minimum compensation ought to be no less than $660.00 a week, or $34,320 a year.

Salaried workers who put in more hours than required should be compensated in accordance with California overtime regulations since they are not exempt. An employer is prohibited from asking a non-exempt salaried worker to perform more than the permitted number of hours without giving overtime compensation.

Example: Toni works at a call center. Nothing huge, maybe twenty people or so. She’s on a pretty standard setup: 40 hours a week, fixed schedule, and her salary is basically tied to that. Since California’s minimum wage in 2025 sits at $16.50 an hour, her weekly pay really shouldn’t fall below $660. That’s just the math.

One week, her supervisor pops in and asks if she can show up on Saturday. Just four extra hours. Sounds small, but it pushes her past that 40-hour mark. And once that happens, the rules change a bit. Anything over those first forty hours has to be paid at a higher rate — time-and-a-half.

So those four hours? They aren’t regular hours anymore. They’re overtime (at $24.75/hour). The total for that week should land somewhere around $736 (overtime + usual hours). Not complicated, but easy for employers to pretend they “forgot.”

Every year, on or before August 1st, California’s Director of Finance decides whether to change the minimum wage in accordance with the Consumer Price Index (CPI). The minimum wage has to be increased by the lower figure of 3.5% and the CPI change if the CPI rose by over seven percent.

As noted below, numerous towns and municipalities in California maintain a minimum wage that is greater than the state’s minimum.

2. Cities With Higher Local Minimum Wages

Several cities and counties surpass the statewide rate:

San Jose: $17.95

Los Angeles (City): $16.78

Berkeley: $18.67

San Francisco: $18.07

LA County: $17.27

San Diego: $17.25

Oakland: $16.89

But if you are employed in California, you have to get paid the greater state minimum wage (not the federal). If you are employed by a county or city with a minimum wage that is greater than the federal minimum wage, you must be given the higher regional minimum wage.

White-collar employees

A white-collar professional (sometimes known as an “exempt employee”) must make at least $68,640.17 a year. According to a forty-hour work week, this is double the minimum wage in California.

Exempt staff (which covers independent contractors and select unionized staff members alongside white-collar employees) are not protected by many California wage & hour rules.

Remember that there are different minimum salary standards for certain exempt professions, including doctors ($103.75 each hour), IT specialists ($118,657.43 a year), and instructors at private schools (double minimum salary if they meet schooling criteria). This whole structure ties the legal salary requirements in California.

Equal Pay

Employees who do “essentially identical work, when evaluated as a composite of ability, effort, and accountability, and carried out under similar work conditions” are entitled to equal compensation under the California Equal Pay Act.

The Fair Pay Act & Equal Pay Act are meant to eliminate the discrepancy in how men & women get paid for performing equivalent work.

1. Equal Pay Act

An employer can’t give men and women distinct wages for comparable duties, except when the company can show that the wage discrepancy is based on any or all of the factors that follow:

A system of seniority.
A system of merit.
A system that calculates earnings based on production volume or quality.

A bona fide element other than gender, such as education, expertise, or experience.

The employer must prove the legitimate factor.

It is not predicated on or generated from a pay disparity based on sex.
It is relevant to the job in question, and
It is in line with a business requirement.

A “business need” is “an underlying lawful company objective to ensure the element relied upon effectively fulfills the business goal it is designed to serve.”

The argument isn’t applicable if the employee shows that there is a different business strategy that would accomplish the same goal without the wage disparity, even if the employer proves that a legitimate factor apart from sex was utilized to differentiate compensation.

2. Fair Pay Act

The Fair Pay Law provides similar safeguards for workers of another ethnic group or race.

Employers who breach the Equal Pay Act are accountable to workers for unpaid wages plus interest. Additionally, the employee can be eligible for liquidated damages, which are an additional equivalent sum.

Pay Cuts

In broad terms, the employer can lower your wage for any legitimate cause. There is no explicit California labor legislation that forbids an employer from decreasing an employee’s remuneration. However, the employer cannot lower your income to a rate lower than the minimum wage.

1. Non-Exempt Workers

If a non-exempt worker is paid at least the minimum wage in California, a company may lower its income. Furthermore, the employer is required to pay the employee at least 1.5 times the minimum wage for an hour for any overtime.

Example: Megan works at this small bar — around ten people total — and she’s a non-exempt worker there. Everything was pretty routine in January 2024. She’d do her 40 hours a week. The paycheck came in at about $1,000. Basically $25 an hour, nothing complicated.

Then, January 2025 shows up, and her boss suddenly says sales are down. Because of that, her pay is getting cut. There is no change in her schedule. Just a smaller number on the check. The next week, she opens her pay stub. It is $800 for the same 40 hours she always works.

It feels off. But legally, she might not have much to push back with. Her hourly rate after the cut comes out to $20 an hour. It is still above the California minimum wage at that point ($16.50). It may not count as a wage violation.

But an employer is not allowed to cut a worker’s pay either illegally or in reprisal for conduct that’s protected.

2. The Equal Pay Act enables you to enquire about salaries

Employees who enquire about the pay of another employee or reveal their own salary are protected by the Equal Pay Act. An employer cannot treat a worker unfairly because of:

Revealing the worker’s personal income,
Talking about other people’s pay, or
Motivating other workers to use their entitlement to fair compensation.

Example: After Megan’s pay got cut, she ended up chatting with her coworker Joe — he’s doing basically the same job she does. She casually asks if his pay went down, too. Joe says he is earning $1200 each week (same hours). The work is the same.

So Megan brings this up with her employer. She asks why her salary was cut while Joe’s wasn’t, especially when they’re doing similar work. Instead of explaining anything, her employer snaps back that she shouldn’t be asking other employees about their pay at all. And then, almost as punishment, tells her that her own salary is being dropped again — down to $700 a week — because she “shouldn’t be poking around in other people’s salaries.”

Megan’s employer is prohibited by California’s Equal Pay Act from retaliating against her by lowering her pay. Furthermore, Megan might have a claim against her company for breaching the Equal Pay Act by compensating male employees at a greater rate than female employees for accomplishing essentially equal work.

3. Exempt Employees: Salary requirements in California

For exempt workers, the basic idea is simple. An employer can cut their salary, but only down to a point. It can’t drop below the minimum salary that California sets for exempt, white-collar roles. And in 2025, that floor is $68,640 a year. Anything below that, and the whole “exempt” status starts to fall apart.

If the pay slips under that line, the employee might not be exempt anymore. And once they’re considered non-exempt, they suddenly get all the protections regular hourly workers have — overtime rules, meal breaks, rest breaks, the whole package.

4. Reduced Hours Can Break the Exemption

There’s another twist. If an employer tries to lower an exempt worker’s pay just because their hours were reduced — or because they missed part of a day — that usually doesn’t fly. Exempt workers aren’t supposed to be paid per hour. Their salary is tied to the role, not to a time sheet. Cutting pay based on hours worked can basically destroy the exempt classification.

Even docking someone’s pay as a punishment can mess with their exempt status and end up making them eligible for overtime they weren’t getting before.

Labor Violation Lawsuits

California employees can go after their employers if wage laws are violated. A lot of big class-action cases come from things like:

Unequal pay,
People are being classified the wrong way, or
Overtime not being paid when it should’ve been.

1. Misclassification Damages

If someone was labeled “exempt” but actually shouldn’t have been, the employer might owe quite a bit. That usually includes unpaid overtime, plus an hour of pay for every meal break the company didn’t give them.

If it’s an Equal Pay Act issue, the employer could owe:

The wages the worker should’ve earned (with interest),
Attorney fees, and
A matching amount in liquidated damages — basically a penalty equal to what they already owe.

2. Workplace Retaliation Damages

When an employer begins to reduce someone’s hours, or abruptly decreases their salary, or even pushes them out of their position just because they bring up equal-pay concerns, that’s really retribution. Plain and simple. And once that happens, the employee isn’t stuck. They can push back, legally.

They might be able to get their position back, pick up the wages they lost along the way, any interest on that money, and whatever else a court decides is the right kind of fix in that situation. These protections exist alongside the salary requirements in California.

Conclusion

When you step back and look at everything together — the rules, the exceptions, the odd little twists — you start to see how California’s pay system isn’t really one rule at all, but a whole web of them. Some parts feel straightforward, others not so much. Minimum wage here, exempt salary floors there, and then all the protections that kick in when employers try to play smart. It’s a lot, but it’s also what keeps the system fair. And in the middle of all this, the salary requirements in California end up shaping more of everyday work life than most people realize.

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Salary Requirements California: Minimum Pay, Exempt Status, and Overtime Rules

Introduction

Salary requirements in California: The Legislation

Minimum Wage

White-collar employees

Equal Pay

Pay Cuts

Labor Violation Lawsuits

Conclusion

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