California Wage and Hour Law Landscape

Overview

This episode provides a comprehensive deep dive into the high-stakes, detailed world of California wage and hour compliance. The discussion examines the enormous risks of getting even small things wrong, which can lead to massive multi-million dollar lawsuits. The episode unpacks who is exempt from overtime, how alternative schedules can backfire, why every minute counts, and how remote work has created a huge jurisdictional puzzle. The focus is on understanding the specific things that make California different, with compliance serving as a fundamental business shield rather than just a bureaucratic headache.

Learning Objectives

After completing this episode, participants will be able to:

1. Calculate 2025 salary thresholds ($5,720 monthly minimum) and apply the three-legged stool for exemptions (salary level, salary basis, duties test)
2. Distinguish exemption requirements across executive (51% management time, 2+ FTE supervision), administrative (office/non-manual, management policy, discretion), professional (licensed, learned, artistic), computer software ($56.97/hour minimum), and outside sales (50% away rule)
3. Navigate alternative work schedule implementation including written proposal, translation requirements (5%+ non-English), 2/3 supermajority secret ballot, and neutrality requirements
4. Apply California's rejection of de minimis rule through Troster v. Starbucks ($102.67 claim for 13 hours over 17 months) and Ward v. CSI for security checks
5. Calculate regular rate of pay including all compensation forms, weighted weekly average impacting 1.5x and 2x overtime calculations
6. Implement meal and rest break requirements including timing rules, complete relief standards, and penalty calculations (one hour pay per violation)
7. Assess multi-state jurisdiction complexity using Bernstein v. Virgin America decision showing California law follows California residents and California-based employers
8. Evaluate ABC test requirements for independent contractor classification and understand PAGA mechanism driving exponential litigation growth from 1,600 (2013) to 7,820 (2023) notices

Key Takeaways

1. $5,720 monthly minimum: 2025 threshold, even $1 less makes employee automatically non-exempt

1. 51% management time: California requires majority time on exempt duties vs. other states' 40%

1. Computer software higher: $56.97/hour, $9,646.96/month, $118,657.43/year statutory minimums

1. AWS procedural minefield: Translation (5%+), 2/3 vote, neutrality, invalidation = retroactive liability

1. De minimis rejected: Troster shows $102.67 claim × employees × years = massive PAGA liability

1. Regular rate complexity: Any bonus error affects all overtime and premium pay calculations

1. Every minute counts: Ward extends compensable time to security checks and parking lot travel

1. Meal/rest penalties: One hour pay per violation, multiple violations same day compound

1. California law follows: Bernstein shows law follows California residents even working outside state

1. California HQ triggers: California-based employer significantly increases California law application

1. ABC test strictest: Prong B (outside usual course of business) often toughest hurdle

1. PAGA explosion: Nearly 5x growth in notices from 2013 to 2023

1. Top 10 settlements: $742 million total in 2023, Seattle verdict $98.3M for time clock rounding

1. Good faith defense: Naranjo provides shield from wage statement penalties with legal uncertainty

1. Compliance is shield: Fundamental business protection, not bureaucratic headache