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400,000 Exempt California Workers May Now Be Eligible for Overtime

“When I seek out professional advice, I don’t want B.S. I want it straight up, with no double talk. I figure do also. I always use plain English, with no sugarcoating no B.S. lawyer talk, and no double talk - just old fashioned, unsweetened, unvarnished truth-just the way that I would want it.” -Bill Turley

California Wage and Hour Attorney Overtime Lawyer

California Overtime vs. Salary

If you are one of the thousands of California workers who is not eligible for overtime pay, you could be eligible for an increase in your salary. New federal regulations have taken effect this year and could raise the yearly pay of nearly ten percent of employees in California, giving an estimated 390,000 individuals the ability to earn overtime if their salaries are not raised.

Salary Requirements for Workers Exempt from Overtime

Under the Fair Labor Standards Act (FLSA), salaried workers who earn a significant wage are exempt from overtime pay. However, as of December 1, 2016, the minimum salary for overtime exempt employees under federal law has increased to nearly double its previous standard. Employers who pay workers less than $47,476 per year are now faced with a choice: either increase a worker’s salary, or allow workers to earn overtime.

The U.S. Department of Labor (DOL) has issued the following paid overtime rules for workers and employers:

  • The new minimum salary for executive employees (including administrative professionals, skilled computer-employees, and other highly-compensated workers) is set at $913 per week, or $47,476 per year. Since the federal minimum salary requirement is higher than California's, California employers must adhere to the higher federal standard.
  • The federal minimum salary requirement will be updated every three years beginning on January 1, 2020. The DOL may increase the minimum salary with each update.
  • Employers can claim bonuses, commissions, and other incentive payments for up to 10% of the new minimum salary threshold for the executive employees.
  • The total-annual-compensation threshold for "highly compensated employees" has increased to $134,004. However, California employers cannot use this exemption for their employees.

Law Makes No Changes to Overtime Duties Test

The DOL has not made any changes to the duty requirements of employees who are exempt from overtime, which can prevent employees from earning overtime if they perform certain types and amounts of work. Please feel free to use our website to learn more about your rights as an employee, including how to get proper compensation for overtime hours.

Disclaimer: Please understand these discussions and/or examples are not legal advice. All legal situations are different. This testimonial, endorsement and/or discussion does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter, your particular case/ situation and/or this particular case/ situation. Thanks, Bill Turley

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