5 ms·

I recently found out that as of February 2016, an exempt employee working full-time in CA must be paid a minimum salary of $41,600/year. It's 2x the minimum wag

I recently found out that as of February 2016, an exempt employee working full-time in CA must be paid a minimum salary of $41,600/year. It's 2x the minimum wage. I support raising the minimum wage in itself, but if that goes up anymore, I simply will not hire certain positions (entry level positions, assistants, maybe even jr devs) because it doesn't make sense at 2x for their skill level and/or role. I understand what they are trying to do, but if business owners can't make a profit in this state with rules like the 2x one, they'll move or outsource as much as possible (offshore, staffing company, etc).

bradleyjg 10y ago
Why not just pay them hourly?
- jsmthrowaway 10y ago
  To avoid the protections of the FLSA.
- exclusiv 10y ago
  It might make more sense to do just hourly. Fridays are way less productive anyway for people in California. 32 hours/week is plenty for many roles and a lot of people would love Friday off in Cali! However, for many that need/want 40 hrs or more - I think they'll end up finding less full-time opportunities or have to work for a staffing company as a result of these laws as companies have to contract with a company directly. They're cracking down on hiring freelancers directly so businesses should ensure that their freelancers have a registered company (LLC) or be an "employee" at a staffing company.
  - dragonwriter 10y ago
    > However, for many that need/want 40 hrs or more You can still pay them hourly for 40 hours or more, you are just subject to wage and hour rules (including premium overtime.) You keep acting like this is a minimum pay for full-time employees in certain jobs, when it is, in fact, a minimum monthly salary to qualify for certain exemptions from wage and hour rules.
    - exclusiv 10y ago
      Yes I see your post to the federal and state rules and it clarifies this greatly so thank you. At the very least - there's extra admin overhead and rules from not having them exempt (paying less than the minimum) which should be weighed against the exemptions you get from paying the minimum salary amounts for certain jobs. For my company, I think we'll move toward lower but fair salaries and less hours and pay any overtime needed at times for some roles. I bet there's a lot of companies paying under the $~87k for computer related professionals that do not pay overtime. While the limit was lower about 7 yrs ago when I was working for the man (an agency), I definitely didn't get overtime for many long weeks and I was not exempt at the time.
twic 10y ago
Why not hire them at a salary below the threshold, and not ask them to work overtime?
- exclusiv 10y ago
  You can't hire them at a salary below that 2x minimum wage (41.6k) threshold for the law I noted if they're a full-time 40 hr / week employee. Yes - for the parent's law you could not have them work overtime.
  - nucleardog 10y ago
    Uh, yes you can. You can hire someone at $10/hr (minimum wage) salaried at 40hr/week. You just can't have them work unpaid overtime. You can still have them work overtime, you'll just need to compensate them for it. If your business can't survive without a ton (if it's only a little here and there, then this shouldn't be much of a hardship?) of unpaid overtime from low-paid employees (less than $20/hr), then that sounds like an issue with your business.
    - exclusiv 10y ago
      Yes I was mistaken on the rules for professional exemptions so I apologize. They really don't apply to my company anyway since I can opt to pay less for certain roles than the minimum salary required for exemptions. Overtime spikes won't be a big deal because all of our employees (any skill-level) rarely go over 40 hours each week. If they do at times, it's not by much. For many positions I think 32 hours / week is better anyway and if there's overtime then it won't matter much at all, because we're not paying over the minimum to get exemptions and then trying to extract 50-60+ hours per week from our employees like many firms do.
  - dragonwriter 10y ago
    > You can't hire them at a salary below that 2x minimum wage (41.6k) threshold for the law I noted if they're a full-time 40 hr / week employee. Yes, you can. If you hire them for less than that, they just aren't exempt from state wage, hour, etc. rules, so you have to pay them overtime, etc. It is not a minimum pay for full-time employees, it is a minimum salary threshold for employees that otherwise qualify for either the professional, executive, or administrative exemption to wage and hour laws. Its basically the same as the other law, except the other law covers federal wage and hour rules, and the California law covers California wage and hour rules. More detail in https://news.ycombinator.com/item?id=12592278 https://news.ycombinator.com/item?id=12592278
AJ007 10y ago
There is data suggesting that companies have already been moving more employees to part time. It is tricky to see exactly what is going on, but you have people who are employed "full time" but just working for multiple employers, who end up paying less because all sorts of other rules won't kick in. If there is a big pool of labor this would probably continue to occur. Raising the minimum wage is pretty scary when taking a look at the trends of telecommuting (a decade of experience with this and counting, global broadband, better hardware, software, continuing to get better), mechanical automation, and software automation (which one might say AI but includes a lot more.) A lot of employees are already on the cusp of being non competitive. Instead of incentivizing a calm transition policy we are incentivizing a rapid expansion of automation. Creating a bunch of additional layers of policy to force employers to hire humans and pay them a lot misses the point. The answer is to make sure it is cheaper, easier, and more sustainable to meet both basic & advanced human needs rather than try to focus on inflating prices until some sort of magic prosperity emerges (besides the magic of urban land owners making a great return on their investments.)
- toomuchtodo 10y ago
  You can always tax automation to pay for the segment of the population that is unable to find work. Automation replaces people, it happens. We just ensure owners of the automation don't solely reap the benefits. The magic prosperity you speak of is already here; there is no need for a 40 hour work week with the productivity gains occurring since the 70s. There simply hasn't been an organized effort to reduce the work week to 3-4 work days, yet.
st3v3r 10y ago
If you can't make a profit without extremely lowballing and undercutting your employees, do you deserve to stay in business?
- exclusiv 10y ago
  Your comment is so simplistic and inaccurate. It's not lowballing and undercutting employees to pay $41.6k to lower level people for 40 hours of work. Especially when you layer on good benefits like we do that aren't accounted for in the salary requirement. We do 3% of salary automatic contribution to 401k each year, allow employees to work from home, good healthcare and vacation/discretionary, etc. Other states don't have these rules and competition in many industries is across states or globally.
  - deleted 10y ago
    [deleted]
  - dragonwriter 10y ago
    > It's not lowballing and undercutting employees to pay $41.6k to lower level people for 40 hours of work. And nothing in the actual law prevents you from paying $41.6k or less (the whole way down to the minimum wage) for 40 hours of work. What you can't do is pay $41.6k or less and then not pay overtime. (And the threshold is much higher if you rely on the computer-related work exemption, and you have to pay overtime regardless of base pay if the work doesn't qualify for some exemption -- unlike the Feds which do at $100k [rising to $134k], California doesn't have an unqualified "high-pay" exemption.)
  - st3v3r 10y ago
    "It's not lowballing and undercutting employees to pay $41.6k to lower level people for 40 hours of work" Depending on the job, it can be. But that's not what we're talking about. We're talking about doing that, and not paying overtime.
- prostoalex 10y ago
  US steel companies, coal miners and large-scale manufacturers answered a resounding "no" to that, and yet their former employees are still unhappy.
dragonwriter 10y ago
> I recently found out that as of February 2016, an exempt employee working full-time in CA must be paid a minimum salary of $41,600/year. It's 2x the minimum wage. The new federal minimum requirement that goes into effect Dec. 1 (for those in the special job-duties related exemptions; there's a higher one for pay alone) is $47,476/yr, anyway. The California minimum for a salaried exempt employee under the exemption for computer-related professions is $87,185.14. [0] The 2×minimum wage rule applies to professional [1], administrative [2], and executive [3] employees who have over 50% of their time in highly-responsible work of types defined in the law. It doesn't seem likely to apply to the entry level, and jr. dev positions you are talking about (and not "assistants", either, except for executive assistants to whom some portion of discretionary authority from the executive is delegated.) And, in either the federal or state case, if they are paid less than that amount, they are not exempt from wage and hour (e.g., overtime) rules. > I support raising the minimum wage in itself, but if that goes up anymore, I simply will not hire certain positions (entry level positions, assistants, maybe even jr devs) because it doesn't make sense at 2x for their skill level and/or role. I don't understand this. Other than the fact that basically none of the positions you identify are likely to be covered by the double minimum wage threshold that you are complaining about (devs for sure would be covered by the much higher computer-related threshold, and generic entry level employees and assistants aren't likely to qualify under any exemption in the first place, regardless of salary), even if they were you absolutely can hire them for lower salaries, they just aren't exempt from wage and hour laws (e.g., overtime requirements, etc.) if you do. You seem to fail to understand either the applicability or the meaning of California's law here. [0] http://www.dir.ca.gov/dlse/LC515-5.pdf http://www.dir.ca.gov/dlse/LC515-5.pdf [1] http://www.dir.ca.gov/dlse/Glossary.asp?Button1=P#professional%20exemption http://www.dir.ca.gov/dlse/Glossary.asp?Button1=P#profession... [2] http://www.dir.ca.gov/dlse/Glossary.asp?Button1=A#administrative%20exemption http://www.dir.ca.gov/dlse/Glossary.asp?Button1=A#administra... [3] http://www.dir.ca.gov/dlse/Glossary.asp?Button1=E#executive%20exemption http://www.dir.ca.gov/dlse/Glossary.asp?Button1=E#executive%...
- exclusiv 10y ago
  Thanks for clarifying. To color up my comment: I have been hiring Jr. Devs that have little or no experience and are doing career changes. They don't have computer science backgrounds, usually just some bootcamps and personal learning. We also have entry level / jr project coordinators working on tech projects and other admins and exec assistants which seem like they could fall under the administrative rules. So basically we can hire them for less than the 2x salary rule but we have to manage overtime and be subject to other rules. Appreciate the links.
gozur88 10y ago
I think this is a good rule. In the '90s I worked on a government contract where the company moved as many people as possible to salaried positions so they weren't covered by area wage and overtime provisions of the contract. We had people losing significant portions of their income when the company decided it could get away with the reclassification. There's a lot of grey area in job classifications, and companies will run with it if you give them the chance. They have to, in fact, because the competition will.

bradleyjg 10y ago

Why not just pay them hourly?

jsmthrowaway 10y ago
To avoid the protections of the FLSA.
exclusiv 10y ago
It might make more sense to do just hourly. Fridays are way less productive anyway for people in California. 32 hours/week is plenty for many roles and a lot of people would love Friday off in Cali! However, for many that need/want 40 hrs or more - I think they'll end up finding less full-time opportunities or have to work for a staffing company as a result of these laws as companies have to contract with a company directly. They're cracking down on hiring freelancers directly so businesses should ensure that their freelancers have a registered company (LLC) or be an "employee" at a staffing company.
- dragonwriter 10y ago
  > However, for many that need/want 40 hrs or more You can still pay them hourly for 40 hours or more, you are just subject to wage and hour rules (including premium overtime.) You keep acting like this is a minimum pay for full-time employees in certain jobs, when it is, in fact, a minimum monthly salary to qualify for certain exemptions from wage and hour rules.
  - exclusiv 10y ago
    Yes I see your post to the federal and state rules and it clarifies this greatly so thank you. At the very least - there's extra admin overhead and rules from not having them exempt (paying less than the minimum) which should be weighed against the exemptions you get from paying the minimum salary amounts for certain jobs. For my company, I think we'll move toward lower but fair salaries and less hours and pay any overtime needed at times for some roles. I bet there's a lot of companies paying under the $~87k for computer related professionals that do not pay overtime. While the limit was lower about 7 yrs ago when I was working for the man (an agency), I definitely didn't get overtime for many long weeks and I was not exempt at the time.

twic 10y ago

Why not hire them at a salary below the threshold, and not ask them to work overtime?

exclusiv 10y ago
You can't hire them at a salary below that 2x minimum wage (41.6k) threshold for the law I noted if they're a full-time 40 hr / week employee. Yes - for the parent's law you could not have them work overtime.
- nucleardog 10y ago
  Uh, yes you can. You can hire someone at $10/hr (minimum wage) salaried at 40hr/week. You just can't have them work unpaid overtime. You can still have them work overtime, you'll just need to compensate them for it. If your business can't survive without a ton (if it's only a little here and there, then this shouldn't be much of a hardship?) of unpaid overtime from low-paid employees (less than $20/hr), then that sounds like an issue with your business.
  - exclusiv 10y ago
    Yes I was mistaken on the rules for professional exemptions so I apologize. They really don't apply to my company anyway since I can opt to pay less for certain roles than the minimum salary required for exemptions. Overtime spikes won't be a big deal because all of our employees (any skill-level) rarely go over 40 hours each week. If they do at times, it's not by much. For many positions I think 32 hours / week is better anyway and if there's overtime then it won't matter much at all, because we're not paying over the minimum to get exemptions and then trying to extract 50-60+ hours per week from our employees like many firms do.
- dragonwriter 10y ago
  > You can't hire them at a salary below that 2x minimum wage (41.6k) threshold for the law I noted if they're a full-time 40 hr / week employee. Yes, you can. If you hire them for less than that, they just aren't exempt from state wage, hour, etc. rules, so you have to pay them overtime, etc. It is not a minimum pay for full-time employees, it is a minimum salary threshold for employees that otherwise qualify for either the professional, executive, or administrative exemption to wage and hour laws. Its basically the same as the other law, except the other law covers federal wage and hour rules, and the California law covers California wage and hour rules. More detail in https://news.ycombinator.com/item?id=12592278 https://news.ycombinator.com/item?id=12592278

AJ007 10y ago

There is data suggesting that companies have already been moving more employees to part time. It is tricky to see exactly what is going on, but you have people who are employed "full time" but just working for multiple employers, who end up paying less because all sorts of other rules won't kick in. If there is a big pool of labor this would probably continue to occur. Raising the minimum wage is pretty scary when taking a look at the trends of telecommuting (a decade of experience with this and counting, global broadband, better hardware, software, continuing to get better), mechanical automation, and software automation (which one might say AI but includes a lot more.) A lot of employees are already on the cusp of being non competitive. Instead of incentivizing a calm transition policy we are incentivizing a rapid expansion of automation. Creating a bunch of additional layers of policy to force employers to hire humans and pay them a lot misses the point. The answer is to make sure it is cheaper, easier, and more sustainable to meet both basic & advanced human needs rather than try to focus on inflating prices until some sort of magic prosperity emerges (besides the magic of urban land owners making a great return on their investments.)

toomuchtodo 10y ago
You can always tax automation to pay for the segment of the population that is unable to find work. Automation replaces people, it happens. We just ensure owners of the automation don't solely reap the benefits. The magic prosperity you speak of is already here; there is no need for a 40 hour work week with the productivity gains occurring since the 70s. There simply hasn't been an organized effort to reduce the work week to 3-4 work days, yet.

st3v3r 10y ago

If you can't make a profit without extremely lowballing and undercutting your employees, do you deserve to stay in business?

exclusiv 10y ago
Your comment is so simplistic and inaccurate. It's not lowballing and undercutting employees to pay $41.6k to lower level people for 40 hours of work. Especially when you layer on good benefits like we do that aren't accounted for in the salary requirement. We do 3% of salary automatic contribution to 401k each year, allow employees to work from home, good healthcare and vacation/discretionary, etc. Other states don't have these rules and competition in many industries is across states or globally.
- deleted 10y ago
  [deleted]
- dragonwriter 10y ago
  > It's not lowballing and undercutting employees to pay $41.6k to lower level people for 40 hours of work. And nothing in the actual law prevents you from paying $41.6k or less (the whole way down to the minimum wage) for 40 hours of work. What you can't do is pay $41.6k or less and then not pay overtime. (And the threshold is much higher if you rely on the computer-related work exemption, and you have to pay overtime regardless of base pay if the work doesn't qualify for some exemption -- unlike the Feds which do at $100k [rising to $134k], California doesn't have an unqualified "high-pay" exemption.)
- st3v3r 10y ago
  "It's not lowballing and undercutting employees to pay $41.6k to lower level people for 40 hours of work" Depending on the job, it can be. But that's not what we're talking about. We're talking about doing that, and not paying overtime.
prostoalex 10y ago
US steel companies, coal miners and large-scale manufacturers answered a resounding "no" to that, and yet their former employees are still unhappy.

dragonwriter 10y ago

> I recently found out that as of February 2016, an exempt employee working full-time in CA must be paid a minimum salary of $41,600/year. It's 2x the minimum wage. The new federal minimum requirement that goes into effect Dec. 1 (for those in the special job-duties related exemptions; there's a higher one for pay alone) is $47,476/yr, anyway. The California minimum for a salaried exempt employee under the exemption for computer-related professions is $87,185.14. [0] The 2×minimum wage rule applies to professional [1], administrative [2], and executive [3] employees who have over 50% of their time in highly-responsible work of types defined in the law. It doesn't seem likely to apply to the entry level, and jr. dev positions you are talking about (and not "assistants", either, except for executive assistants to whom some portion of discretionary authority from the executive is delegated.) And, in either the federal or state case, if they are paid less than that amount, they are not exempt from wage and hour (e.g., overtime) rules. > I support raising the minimum wage in itself, but if that goes up anymore, I simply will not hire certain positions (entry level positions, assistants, maybe even jr devs) because it doesn't make sense at 2x for their skill level and/or role. I don't understand this. Other than the fact that basically none of the positions you identify are likely to be covered by the double minimum wage threshold that you are complaining about (devs for sure would be covered by the much higher computer-related threshold, and generic entry level employees and assistants aren't likely to qualify under any exemption in the first place, regardless of salary), even if they were you absolutely can hire them for lower salaries, they just aren't exempt from wage and hour laws (e.g., overtime requirements, etc.) if you do. You seem to fail to understand either the applicability or the meaning of California's law here. [0] http://www.dir.ca.gov/dlse/LC515-5.pdf http://www.dir.ca.gov/dlse/LC515-5.pdf [1] http://www.dir.ca.gov/dlse/Glossary.asp?Button1=P#professional%20exemption http://www.dir.ca.gov/dlse/Glossary.asp?Button1=P#profession... [2] http://www.dir.ca.gov/dlse/Glossary.asp?Button1=A#administrative%20exemption http://www.dir.ca.gov/dlse/Glossary.asp?Button1=A#administra... [3] http://www.dir.ca.gov/dlse/Glossary.asp?Button1=E#executive%20exemption http://www.dir.ca.gov/dlse/Glossary.asp?Button1=E#executive%...

exclusiv 10y ago
Thanks for clarifying. To color up my comment: I have been hiring Jr. Devs that have little or no experience and are doing career changes. They don't have computer science backgrounds, usually just some bootcamps and personal learning. We also have entry level / jr project coordinators working on tech projects and other admins and exec assistants which seem like they could fall under the administrative rules. So basically we can hire them for less than the 2x salary rule but we have to manage overtime and be subject to other rules. Appreciate the links.

gozur88 10y ago

I think this is a good rule. In the '90s I worked on a government contract where the company moved as many people as possible to salaried positions so they weren't covered by area wage and overtime provisions of the contract. We had people losing significant portions of their income when the company decided it could get away with the reclassification. There's a lot of grey area in job classifications, and companies will run with it if you give them the chance. They have to, in fact, because the competition will.