California Employers Beware of the FLSA “White Collar” Exemption, California Minimum Wage, and City Wage Ordinances
On Tuesday, November 22, 2016, a Texas federal judge entered a nationwide injunction blocking the U.S. Department of Labor from implementing a controversial rule that would have raised the salary level for federal “white collar” exemptions from $23,660 per year to $47,476 per year effective December 1, 2016.
However, California employers should be aware of the increase to California minimum wages that goes into effect January 1, 2017 for employers of 26 or more employees ($10.50/hour), and January 1, 2018 for employers of less than 26 employees ($10.50/hour). Accordingly, effective January 1, 2017 California employers of 26 or more employees must pay a salary of no less than $43,680 per year to their overtime-exempt employees. Employers of less than 26 employees will have to increase salaries to $43,680 per year effective January 1, 2018.
Further, California employers should remain vigilant of city ordinances that require payment of minimum wages higher than those required by California state law. Although local ordinances do not impact the salary calculation for overtime-exempt employees, the ordinances prescribe the minimum wages for non-exempt employees working within the geographic boundaries of these cities.
This communication may be considered advertising in some jurisdictions. It is intended to provide general information about legal developments and is not legal advice. If you have questions about the contents of this alert, please contact Oleg I. Albert at (415) 697-2000 or firstname.lastname@example.org.