On April 18, 2016, the U.S. Department of Labor announced the final rule regarding overtime regulations under the Federal Fair Labor Standards Act (FLSA). More than four million workers will now be eligible for overtime pay. Under the new rule, salaried workers that earn up to $47,476 annually must receive time and a half overtime pay when they work over 40 hours a week. This salary threshold will now be updated every three years. These new rules will be effective starting December 1, 2016.

Under California law, the new minimum salary threshold for exempt status under the FLSA will increase from $41,600 to $43,680 on January 1, 2017. California employers should also note that their exempt employees must meet the salary threshold under the FLSA and must meet California’s stricter duties test. This test requires that an employee spend more than 50% of their time working on exempt duties.

Next Steps for CA Employers

  • Employers should review their exempt classifications to ensure that their employees meet the new minimum salary threshold and can pass the California’s stricter duties test.
  • Employers may need to reclassify employees or increase salaries if an employee’s salary is below the new salary threshold.

If you have any questions about your obligations as an employer, please contact us at info@mitzelgroup.com or reach out to your Mitzel Group, LLP attorney directly.