Employer Update - Final Rule: Overtime

 Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees under the Fair Labor Standards Act

Wednesday May 18th, the Department of Labor announced the release of their Final Rule to Update the Regulations Defining and Delimiting the Exemption for Executive, Administrative, and Professional Employees.
 
The Final Rule will:

● Raise the salary threshold from $23,660 to $47,476 a year, or from $455 to $913 a week.  While this doubles the current salary threshold, it is also responsive to public comments, and sets the salary threshold at the 40th percentile of full-time salaried workers in the lowest income Census region (currently the South)

● Updates the salary threshold every three years to ensure the threshold is maintained at the 40th percentile of full-time salaried workers in the lowest income region of the country.  Based on projections of wage growth, the threshold is expected to rise to more than $51,000 with the first update on January 1, 2020.

● Raise the “highly compensated employee” (HCE) annual salary threshold – from $100,000 to $134,004.

● Makes no changes to the “duties test” under the white collar exemptions; workers earning more than the salary threshold are still subject to the duties test to determine eligibility for overtime.

● Allows bonuses and incentive payments to count toward up to 10 percent of the new salary level.

The effective date of the final rule is December 1, 2016. The initial increases to the standard salary level (from $455 to $913 per week) and HCE total annual compensation requirement (from $100,000 to $134,004 per year) will be effective on that date. Future automatic updates to those thresholds will occur every three years, beginning on January 1, 2020.

Contact our office today to receive your free consultation!
You have been receiving many emails and hearing the news about updates to the California minimum wage and it is confusing! That’s why you have US!

We have included the schedule for the increases for most of CA but there are City Ordinances that differ from the whole of CA. We have included that breakdown in the attachment as well.
 
We are here to assist so please email or call our office if you have any questions.

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Increases Begin January 1, 2017 for Certain Employers 

Under a new law, the California minimum wage is scheduled to rise as follows:

For employers with 26 or more employees, the minimum wage will be:
 
From January 1, 2017 to December 31, 2017: $10.50 per hour.
From January 1, 2018 to December 31, 2018: $11 per hour.
From January 1, 2019 to December 31, 2019: $12 per hour.
From January 1, 2020 to December 31, 2020: $13 per hour.
From January 1, 2021 to December 31, 2021: $14 per hour.
From January 1, 2022 until adjusted for inflation: $15 per hour.
 
For employers with 25 or fewer employees, the minimum wage will be:
 
From January 1, 2018 to December 31, 2018: $10.50 per hour.
From January 1, 2019 to December 31, 2019: $11 per hour.
From January 1, 2020 to December 31, 2020: $12 per hour.
From January 1, 2021 to December 31, 2021: $13 per hour.
From January 1, 2022 to December 31, 2022: $14 per hour.
From January 1, 2023 until adjusted for inflation: $15 per hour.