by Teresa R. Tracy
THE NEW FLSA RULE ON EXEMPT STATUS: WHAT CALIFORNIA EMPLOYERS NEED TO KNOW
Effective January 1, 2020, a new rule will become effective under the federal Fair Labor Standards Act (FLSA), revising the exemptions for executive, administrative, professional, outside sales, and computer employees. It is estimated that 1.2 million currently exempt employees who earn at least $55 per week but less than the standard federal salary level of $684 per week will, without some intervening action by their employers, gain overtime eligibility; that an additional 2.2 million white collar employees who are currently nonexempt because they do not satisfy the duties requirements for exempt status and currently earn within the above range will have their overtime-eligible status strengthened because they will now fail both the salary level and duties tests; and an estimated 101,800 employees who are currently exempt under the highly compensated employee test will be affected by the increase in the total annual compensation level for this exemption.
Highlights of Final Rule:
What It Means for California Employees:
Employers who have employees in California should be aware that nothing in the FLSA final rule changes California law and regulations. As always, an employer must comply with the most stringent component of any law or regulation in order to be in complete compliance. California law and regulations are typically more stringent than federal ones.
Here are major differences between the two laws and regulations regarding exempt status:
This article is made available for educational purposes and to provide general information on current legal topics, not to provide specific legal advice. The publication of this article does not create any attorney-client relationship and should not be used as a substitute for competent legal advice from a licensed professional attorney.