Bruce’s Summary: It has now happened. Effective December 1, 2016, the new federal minimum salary requirements for employees to be considered exempt from FLSA’s overtime provisions will go into effect and will exceed California’s minimum requirements. According to the author, starting December 1, 2016, the new federal rule raises the minimum salary threshold to $913 per week, or $47,476.00 per year and automatically updates the amount every three years, beginning January 1, 2020.
So for an employer In California to maintain exempt status their employee’s salary must be increased to an amount greater than that required by the new federal regulations of $47,476.00 per year.
If the salary above is less and the employer decides to not increase the employee’s salary to the minimum level, the employee falls into an nonexempt status and is entitled to overtime for hours worked in excess of 40 per week or eight hours per day (in California).
Remember, a lot of employee’s worked very hard to get to an exempt status and now, if not handled correctly, this could have a negative morale effect for those being reclassified to nonexempt and now having to fill out a time card. This will be a true paradigm shift and how it’s done should take a little more thought than the burden it may or may not have on management. Management can get over it, but employees (human beings) may not if the transition isn’t handled with a little more thought to the process. Prepare accordingly. “None of the information contained herein should be construed as legal advice, nor are Calvin Associates consultants engaged to offer legal advice. If there is a need for legal advice, please contact and seek the advice of independent legal counsel.” www.calvin-associates.com