Promoting an hourly worker to a salaried position can incentivize that professional and others to perform to the best of their capabilities. Upward mobility within a company inspires loyalty and can improve job performance in many cases.
A salaried manager is also potentially an exempt worker, which can help reduce the pressure on the company’s staffing budget and scheduling practices. Occasionally, managers paid on a salary basis may file wage claims and assert that they should receive overtime pay based on California wage laws.
How can California employers avoid this scenario?
Proper pay and job duties are key
For a manager to truly be exempt when paid on a salary basis, their salary must meet the minimum threshold established by state and federal regulations. Currently, salaried professionals in California must make at least $70,304 to be exempt from overtime pay. The salary may be higher in certain industries, such as the fast food sector.
For managers, in particular, there is also an obligation to have them perform duties that are distinct from those of typical crew members. Exempt managers generally need to spend at least 50% of their work time performing tasks other than those performed by the crews that they supervise. If they spend the vast majority of their time doing the same work they performed before their promotion, the lack of distinct managerial duties could potentially strengthen their overtime wage claim.
Evaluating employment practices and worker complaints with a legal professional can help businesses ensure they remain compliant with all federal and California state payroll regulations. Companies that understand the unique requirements imposed by California statutes can reduce the likelihood of workers initiating or prevailing in wage and hour lawsuits.