Effective December 1, 2016, the minimum salary requirement for so-called “white collar” exempt employees in California will increase from California’s current minimum requirement of $800 per week to $913 per week – a new standard under the federal Fair Labor Standards Act (FLSA).
Reports from the United States Department of Labor indicate that the salaries of almost 10% of California employees currently classified as exempt are below the new federal minimum salary rate.
With California’s minimum wage scheduled to increase to $10.50 in 2017 (there is a 1 year implementation delay for employers with fewer than 26 employees), the effective minimum salary requirement for exempt employees according to federal law in 2017 will equate to $3,796 more annually than the minimum salary required to classify employees as exempt from overtime per California law. California employers are required to meet the requirements of both state and federal laws. In addition, if approved by voters on June 7th, the minimum wage for workers in San Diego will increase to $10.50 per hour effective immediately upon certification of the election results and $11.50 per hour effective January 1, 2017.
Employers have two options for compliance by December 1st:
1. Change the status of employees classified as exempt not receiving the required minimum salary per federal law to nonexempt. Employers that choose this option will be required to maintain work time and meal break records for these employees and provide overtime pay to these employees, if applicable.
2. Pay all subject employees the minimum salary requirement set forth by the new federal law.
Certain pay strategies could prove helpful to employers in managing necessary changes. The new federal law allows employers to satisfy up to 10% of the minimum salary threshold through nondiscretionary bonuses and commissions provided such bonuses or commissions are paid at least quarterly. And, some employers may find it helpful to institute alternative workweeks schedules in the workplace.
Now is also a good time to review employee classifications and assess the positions of employees just at or slightly above the 50% exempt duties threshold.
Join us on July 14th for an informative presentation with Senior Deputy Labor Commissioner Linda Aguilar
When: Noon; registration and networking start at 11:30 a.m.
Where: Hampton Inn & Suites (corner of Scripps Poway Parkway and Stowe Dr. at 14068 Stowe Drive, Poway)
Cost: $40/person on or before June 10th; $50/person after June 10th (LMRC Ambassadors receive a $10 discount off of these prices);
Register here today: Upcoming Events Page.
This program is co-sponsored by the Poway Business Park Association and San Diego-Poway Hampton Inn & Suites.
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