US Department of Labor Increases Exempt Employee Salary Requirement Effective December 1, 2016

May 25, 2016

 

On May 18, 2016, the United States Department of Labor announced a new rule which will double the salary required for an employee to be exempt from overtime, from $22,660 to $47,476, or $913 per week.  Currently, California law requires that employers pay their exempt employees at least twice the state minimum wage, or the equivalent of $41,600 annually.  Historically, California employers have not had to worry about the federal minimum threshold because California has always had a higher threshold for exempt employee pay.  Beginning December 1, 2016, however, California employers will be required to meet the higher federal threshold of $47,476 annually.  This rule change is expected to affect approximately 150,000 workers in California and more than 4 million workers nationwide.  Exempt employees must still also meet the “duties test” to fall within the professional, administrative or executive exemptions.

 

If you have questions about the Department of Labor’s new rule, or other exemption issues, contact us at info@kennadayleavitt.com.

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