Below is an explanation of how the minimum wage effects an employee’s exempt or non-exempt status under the FLSA:
Effective January 1, 2020, the Department of Labor issued regulations affecting the salary tests used to determine an employee’s exempt status under the FLSA. Under the updated regulations an employee, irrespective of time base, must earn more than two-times the Federal minimum wage:
- Weekly: $684.00
- Monthly: $2,964.00
- Annually: $35,568.00
Those employees who earn less than these amounts will be moved into a non-exempt classification. Employees so affected will be eligible to earn overtime and/or compensatory time off (CTO). Also, those employees will be required to use accrued leave for absences of less than a full day.
Many wonder why the University does not use California’s higher minimum wage when determining FLSA status. The reason is under California law public employees, including employees of the California State University, are expressly excluded from California’s overtime laws: meaning that the FLSA (Federal law) provides the only right to overtime compensation for California public employees. Therefore, the FLSA exemption standard is based on the Federal threshold since public employees do not have a right to overtime compensation under State law.
In short, the only right to overtime California public employees enjoy is under the federal law. So, there is no question the higher California standard does not apply to public employees.
For additional information please review CSU Technical Letter HR/Salary 2019-21.