Exempt Employee Salary Floor Rises in 2025 – New $68,640 Threshold

The legal landscape for wage and hour requirements often changes based on overall increases in what employees may earn. An experienced Riverside County wage and hour attorney at Skapik Law Group can advise you about whether you are being properly paid.

The minimum wage in the state controls one of the three factors that determines whether an employee is exempt from overtime pay requirements and mandatory meal breaks. In California, the minimum wage is higher than the amount required under Federal law. Because the minimum wage increased again on January 1, 2025, the threshold floor for FLSA exemption has also been raised.

Schedule a free initial consultation with a Riverside County employment lawyer at Skapik Law Group by calling us at (909) 398-4404. If you have been underpaid by your employer, or they have otherwise broken the law in certain conditions of your employment, you may be eligible for compensation.

When Are Employees Exempt from FLSA and California Law?

Under both the Fair Labor Standards Act and the California Labor Code, employers are required to pay certain employees overtime, allow them to take meal breaks and pay them more than the minimum wage. These protections apply only when an employee is non-exempt. Employers do not need to observe these protections when the employee is exempt from the coverage of both the FLSA and California law.

There are three separate requirements that an employee must meet to be considered exempt from the obligations described above. Those requirements are as follows:

• The employee must be paid a fixed annual salary instead of an annual one
• They must perform professional, executive or administrative duties
• The employee must be paid twice the state’s annual minimum wage for a 40-hour work week on a 52-week basis.

The Salary Threshold Has Increased Along with the California Minimum Wage

For the last requirement, there is an annual floor for the employee’s yearly earnings. The threshold rises as California’s minimum wage increases. In 2025, the California minimum wage increased to $16.50 per hour. Accordingly, the salary for that is applied to the exemption test has also increased. Based on the calculation described above, the exempt employee salary floor has risen to $68,640 in 2025. Accordingly, more employees may now qualify for overtime pay if they work more than their scheduled 40 hours per week.

Employers need to closely track both these laws and the employee’s hourly earnings to ensure that they are in compliance with labor laws. If the worker’s salary is below that floor, the provisions of both the FLSA and California labor law apply to them. Employers can face significant financial consequences if they fail to pay these employees time and a half overtime and allow them to take meal breaks while on the job.  It is up to the employer to ensure that they follow the law, or else they can face legal consequences. They can be held liable in a civil lawsuit, and they could also face administrative penalties for their failure to properly pay and treat their employees.

Employers Must Monitor All Requirements for Employees to Be Exempt

There is more that employers must monitor than just the annual salary amount. Even if this individual requirement is satisfied, employers must also ensure that the other requirements are met. There may be issues with the actual duties that the employee performs on the job. The test is that they need to perform professional, executive or administrative duties with at least half of their time on the job. There are certain manual tasks that do not qualify as exempt duties. In an FLSA or California labor lawsuit, the court would not only look at outright salary levels, but they would also scrutinize the actual job duties that the employees perform to determine whether they have been improperly denied certain benefits and protections.

If you believe that you were due overtime, or your employer has improperly withheld meal breaks, you may be able to take legal action under federal or state law. You can file an individual or class action lawsuit to seek the compensation that you were due. Your employer may need to settle the case with you or fight you in court. If your employer has been found to have intentionally violated labor laws, they could be subject to additional penalties under both California and federal law.

Contact a Riverside County Wage and Hour Law Firm

If you believe that your employer has failed to pay you in accordance with the law, speak to an experienced Riverside County wage and hour attorney at Skapik Law Group. We can review the facts of your case and help determine whether you can file a lawsuit. You can schedule a free initial consultation with a Riverside County wage an hour lawyer by messaging us online or by calling us today at (909) 398-4404.