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Paying an employee a fixed salary instead of per hour worked doesn't automatically qualify the employee as exempt from wage & hour laws.
To be exempt in California, an employee's job duties and/or salary must meet additional criteria. Here are the most common exemptions in California:
In general, federal law provides for lower minimum salary requirements than California, and more exemptions for specific industries. Whether federal or California standards apply is highly specific to how and where each business operates.
TAKEAWAY: Make sure to periodically review whether your employees are properly classified as exempt or non-exempt. Exemption criteria frequently change – meaning an employee who qualified as exempt when they were hired 5 years ago might not qualify under current regulations.
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