United States Employment Guide

Understanding Minimum Wage Requirements for Exempt Employees

At SailGlobal, our employment policy strictly focuses on exempt (salaried) positions. The current federal minimum salary threshold for exempt employees stands at $35,568 annually. However, five states—California, Colorado, Maine, New York, and Washington—have established higher minimum salary requirements. Employees residing in these states must receive at least the state-mandated minimum salary, while those in other locations adhere to the federal standard.

Federal Income Tax Brackets and Withholding

While the federal minimum wage for hourly workers is $7.25 per hour, salaried employees' tax obligations are calculated based on annual income. The following table outlines the 2024 federal income tax brackets for different filing statuses, which is crucial for accurate payroll withholding calculations.

Employer Payroll Tax Responsibilities

Beyond employee compensation, employers typically incur additional payroll costs ranging from 9.5% to 12.5% of salary, varying by state regulations. These mandatory contributions include:

• Social Security Tax: 6.2% (capped at $9,932.40 annually)
• Medicare Tax: 1.45% (no income cap)
• Federal Unemployment Tax (FUTA): 0.6% on first $7,000 of wages
• State Unemployment Tax (SUTA): 1%-4% (varies by state)
• Workers' Compensation Insurance: 0.25%-0.30%
• State-Specific Taxes: California employers pay an additional 0.38% payroll tax

These figures represent estimates for budgeting purposes. For precise cost calculations tailored to specific employment scenarios, consult with SailGlobal's HR solutions team.

Overtime Regulations and Work Hour Standards

The standard workweek in the U.S. consists of 40 hours across five days (typically Monday-Friday). Under the Fair Labor Standards Act (FLSA) and state laws, non-exempt employees must receive overtime pay (1.5 times regular rate) for hours exceeding 40 per week.

However, exempt positions—which constitute SailGlobal's exclusive employment model—are not subject to mandatory overtime calculations. For these professional roles, compensation is considered inclusive of any potential extended work hours, simplifying payroll administration while ensuring compliance.

Practical Compliance Considerations

When managing a distributed workforce across multiple states, companies must navigate the complex interplay between federal and state regulations. For instance, a California-based exempt employee must meet both the state's higher salary threshold and specific duties tests to maintain exempt status. SailGlobal's approach of focusing exclusively on properly classified exempt positions helps multinational companies avoid common compliance pitfalls while streamlining global payroll operations.