Q: does a business with 1 salaried exempt employee have to pay a certain wage.

A: In California, if your business has one salaried exempt employee, you are required to pay them a minimum salary based on state law. For most exempt employees, this minimum salary is tied to the state’s minimum wage. As of 2024, the minimum salary for an exempt employee must be at least twice the state minimum wage for full-time employment.

In practical terms, this means that for businesses of any size, including those with only one employee, the minimum salary requirement is non-negotiable. As of 2024, California's minimum wage is $16 per hour, which translates to an annual salary of at least $66,560 for full-time exempt employees.

Failing to meet this salary requirement could result in the employee losing their exempt status, which would then entitle them to overtime pay and other protections. Always ensure your pay practices comply with state law to avoid any legal complications.

A: California’s wage-hour laws, including those regarding minimum wages and overtime pay, apply to all employers, regardless of size.

The general rule under the law is that every employee is presumptively entitled to the benefits of the minimum wage and overtime laws. The employer, therefore, bears the onus of establishing whether an employee is properly classified as overtime exempt. In a lawsuit, this is referred to as an “affirmative defense,” as to which the employer bears the burden of proof by a preponderance of the evidence.

Paying an employee on a salary basis, even one that meets or exceeds the equivalent of two times the current California minimum wage, does not by itself satisfy any of the three “white collar” exemptions recognized by California or federal law (i.e., professional, administrative, and executive exemptions). Rather, the employee must spend at leave 51% of their time performing so-called “exempt work,” which is defined very stringently under both federal and state law.

Employers should verify, and periodically re-verify, that an employee who is treated as overtime exempt under one of the white-collar exemptions is properly classified and that their exempt status can be established if ever challenged. Current and accurate job descriptions, with the employee’s input regarding their accuracy, can he a useful tool in focusing on the exempt v. non-exempt nature of an employee’s work.