Whenever an employee is absent or requests time off work because of an illness, injury or other health condition, the employer must immediately determine what laws apply in order to determine its rights and obligations, and those of the employee. This involves a three-step process: (1) determining what statutes apply to the employer; (2) determining what statutes apply to the employee; and (3) determining what statutes apply to the employee's health condition.
What does "exempt" mean? Generally, it means that the employee is exempt from the overtime and rest/meal period provisions of California law. Nonexempt employees generally must be paid at least minimum wage, on an hourly basis, with overtime pay, and must be provided meal and rest periods within set times. Failure to do any of these things will result in penalties/premium pay being owed. Exempt employees are generally (but not always) paid on a salary basis that does not vary depending on hours worked.
In this calendar year, several restaurants within California have announced their intention to ban tipping from their restaurants in favor of paying all employees a "living wage." To do so requires that menu prices be adjusted to make up the difference between what would have been left as a tip, and what the restaurant will now be paying to its employees. The annual income that has been touted by this move is somewhere in the $25,000 to $35,000/year range, not including benefits such as paid health care.