What is required to be on the paycheck statement (or paycheck stub)?
The requirements of a paycheck stub in California are multiple and depend upon the worker and method of compensation.
For hourly workers, according to California Labor Code § 226, the paycheck shall contain an itemized statement in writing showing total wages, total hours worked (different rules for piece rate pay), all deductions, net wages after deductions, the pay period, name of the employee with last four numbers of social, and the name and address of the employer.
What about salaried employees? Can I stop tracking employee hours if the person is paid a salary?
Many employees are paid a salary, but just paying a salary does not necessarily mean that you don’t have to track hours for an employee. For an employee to not have to be tracked on their hours, that employee must be an exempt employee. To further explore legal issues related to employment and compensation, consult with a distinguished business lawyer in San Jose.
You can also learn more about the legal implications of hour tracking and employee classification by reading our detailed guide on rest periods and breaks.
What is the difference between an exempt and non-exempt worker?
This is a complicated answer and can vary by industry and job title. The Department of Labor and Standard Enforcement has a series of Wage Orders that help to define who is exempt (meaning can be paid a salary and hours not tracked and no overtime or meal and rest break issues).
In general (meaning nearly every industry), a few types of employees are considered exempt and don’t need their hours tracked. Engage with our team for expert assistance in resolving business disputes, ensuring compliance, and optimizing operational efficiency.
The first category is Executive Employees.
According to the California Department of Labor Standards and Enforcement, Executives are persons who are in charge of management, such as directing other employees (2 or more), someone with authority to hire and fire employees, regularly exercising discretion and independent judgment, and must be primarily engaged in executive duties, and is paid a salary of no less than two times the state minimum wage for full-time employment at 40 hours a week.
What is primarily engaged?
This means generally that more than 50% of your time is engaged in the executive function. This means more than half of your day. If an employee only manages 3 hours of 8 hours in a day, but then simply does regular work (like a cashier or front desk clerk) then that person would not be an executive.
What is the minimum salary to be exempt?
If the state minimum wage (as of January 2023) in California is $15.50 per hour, then minimum salary would be $31 per hour times 2,080 hours in a year, which is $64,480. If you pay a person less than this salary, then that person is being underpaid. You cannot reduce this salary generally. This is governed by California Labor Code Section 515(c).
The second category is Administrative Employees.
Per the California DLSE website, administrative employees are persons who are involved in the performance of office or work directly related to management policies and general business operations, such as administration of a school system or educational establishment, who customarily and regularly exercise discretion and independent judgment and assist executives in a bona fide executive or administrative capacity, who does special assignments or tasks and is primarily engaged in said duties.
This category of employees also requires a salary of no less than two times the state minimum wage for full-time employment at 40 hours a week.
The third category is Professional Employees.
Professional means a person who is licensed or certified by the State of California is primarily engaged in one of the following recognized professions: law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting, or is primarily engaged in an occupation recognized as a learned or artistic profession requiring knowledge of an advance type in a field or science requiring specialized instruction, work that is original and requires significant talent or imagination, and the work is predominantly intellectual in nature, customarily and regularly exercises discretion and independent judgment.
Professional employees must also have a salary equal to or greater than two times the state minimum wage for full-time employment at 40 hours a week. This definition is per the California DLSE website.
Are there special categories of workers with higher minimum salaries in California?
Yes, there is at least a specific salary for computer software employees. This is under California Labor Code Section 515.5(a)(4). This minimum salary is set by the Department of Labor and Standards and Enforcement and, as of January 1, 2023, is set at $53.80 per hour, with the minimum annual salary exemption now set at $112,065.20 (it adjusts based on the California Consumer Price Index for Urban Wage Earners and Clerical Workers).
