State Salary Vs. Hourly Employee in California

A salaried employee is a worker who is paid a set amount, often on a weekly, bi-weekly, monthly, or other regular pay schedule, regardless of the number of hours worked. Conversely, hourly workers are paid a set wage per hour worked. Salary and hourly employees are each subject to and protected by varying laws at both the state and federal level. It is important that California employers know and understand all labor laws regarding salary and hourly employees to ensure workers are paid correctly and treated fairly.

State vs. Federal FLSA

The federal Fair Labor Standards Act sets the minimum labor standards ensuring the fair treatment of workers in the United States. California labor law offers greater protection in some instances than does the federal standard. For example, the federal minimum hourly wage is $7.25 per hour, but the California minimum hourly wage is $8 per hour at the time of publication. It is essential that California employers know and understand both sets of laws and always comply with the set that offers employees the greatest protection.

Wage and Hours

The wages and hours of a salaried employee versus that of an hourly employee are two of the most essential elements to consider. For example, hourly paid employees are typically entitled to overtime pay for any hours worked over 40 in a given workweek. Also, California differs from the FLSA in that it requires overtime to be paid to hourly employees that work more than eight hours in a day regardless of the total hours worked in the workweek. Meanwhile, salaried employees are typically paid the same set amount, with no overtime entitlement, regardless of the number of hours worked. In California, overtime for hourly workers is calculated according to the regular rate of pay.

Exempt vs. Nonexempt

Salaried employees are typically classified as exempt from the FLSA, while hourly employees are typically classified as nonexempt. According to the California Department of Industrial Relations, a nonexempt worker is one who is covered by both federal FLSA and the provisions of the California Industrial Welfare Commission Orders, while an exempt worker is not.

Exceptions

While salaried employees are typically considered exempt from FSLA and hourly employees are typically nonexempt, there are some exceptions. For example, executives and professionals -- such as doctors, lawyers, architects, and teachers -- are always exempt from FLSA protection, even if they are paid on an hourly basis. Also, some salaried employees are entitled to overtime pay. Additionally, California labor law includes specific exceptions for certain workers, such as sheepherders. For example, in California, the minimum monthly salary for sheepherders is $1,422.52.

References

• Difference Between Salary and Hourly
• U.S. Department of Labor: Compliance Assistance -- Fair Labor Standards Act (FLSA)
• California Department of Industrial Relations: Minimum Wage
• California Department of Industrial Relations: Overtime
• California Department of Industrial Relations: DLSE -- Glossary -- N