Key Changes in Salary Thresholds and Compliance Requirements for 2025
By: Leiann Laiks, Esq.
As part of California’s ongoing adjustments to labor regulations, there are updates to the salary exemption test for certain employee classifications. Here’s what you need to know:
Salary Exemption Test Increase:
- The salary exempt test, which serves as a key component in determining eligibility for Administrative, Executive, and Professional Exemptions, has been adjusted.
- In 2025, the threshold rises from $66,560 to $68,640 annually (equivalent to 2 times the minimum wage).
- Be aware, that in addition to meeting the salary test, exempt employees must also meet the duties test to be exempt from overtime, meal and rest period requirements, and other wage and hour laws.
Minimum Wage Increase:
- Effective January 1, 2025, California minimum wage increases to $16.50/hour.
Local Ordinances Minimum Wage Increase:
- Oakland: $16.89 per hour as of January 1, 2025
- Palo Alto: $18.20 per hour as of January 1, 2025
- Petaluma: $17.97 per hour as of January 1, 2025
- Berkeley: $18.67 per hour as of July 1, 2024
- Burlingame: $17.43 per hour as of January 1, 2025
- Cupertino: $18.20 per hour as of January 1, 2025
- Daly City: $17.07 per hour as of January 1, 2025
These are only some of the local minimum wage increases. Be sure to check your local jurisdiction.
By staying informed about these updates, businesses can ensure compliance and avoid lawsuits and disputes.
This blog is written as of March 2025. Recommendations and legal requirements are changing rapidly, so please continue to review our legal updates or review postings on relevant government websites.
All blogs on this site are for educational purposes only, do not constitute legal advice or opinion, and should not be applied to your situation, or any specific situation, without consultation with counsel. Strategy Law, LLP does not provide any legal advice concerning any matter discussed in a blog except upon formal engagement including, without limitation, execution of Strategy Law, LLP’s formal legal services agreement, and with respect to specific factual situations. No blog constitutes a guarantee, warranty, or prediction regarding the result of any legal matter discussed in the blog or any representation.
