There are labor laws that restrict who can be labeled as "exempt" (salaried) employees. They have to demonstrably serve in a management capacity. I'm not positive, but I believe their calculated hourly rate can't fall below minimum wage either. I've seen rumblings that the requirements to be considered as "exempt" status are going to be made more stringent in the near future, and the minimum permissible salary will be upped as well.
Los Angeles sets Minimum Wage of $15/hr
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