New Department of Labor Regulations impact overtime in California
California employees are protected by both California and federal law. The general rule for wage laws is that whichever law provides the most protection to the employee is applicable. In California, very frequently, this is California law. However, this is not always the case.
Effective December 1, 2016, the federal Department of Labor enabled a new set of regulations dealing with overtime. While the regulations cover a variety of topics, a key issue was the raising of the minimum salary level. Effective December 1, 2016, the salary level is $913/week or $47,476 per year. If you make less than that, then you cannot be exempt under the federal executive, administrative, or professional exemptions -- though you could still be exempt under other exemptions, such as the "outside sales exemption."
As of December 16, 2106, there is active litigation between the federal Department of Labor and several of the states regarding whether the Department of Labor has authority to set a salary level for exemptions. You can read a brief description of the litigation from the Department of Labor.
Although the Department of Labor lost on the issue in a district court in Texas, that holding is (1) not binding on private workers in California and (2) has already been appealed.
While the final status of the law has yet to be determined, the current regulations, as applied to workers in California, are that you must make a salary of $913/week in order to be exempt under the executive, administrative, or professional exemptions under federal law.
This article is dated December 16, 2016. This area of the law is not settled and you should not rely on these statements as the current state of the law.
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