There has been much discussion about the Department of Labor (DOL)’s proposed changes to federal overtime rules under the Fair Labor Standards Act (FLSA). California employers may have mostly ignored the federal overtime rules because California’s rules are more protective of employees and have a higher threshold for overtime exemptions. However, if these rules go into effect, California employers will have to make some adjustments. Failure to properly classify employees as exempt vs non-exempt and follow overtime rules could be costly for employers. What Are the Proposed Changes to Federal Overtime Rules? Under FLSA regulations, an employee is exempt from the right to overtime pay if s/he meets the following 3 requirements: Paid on a salary basis regardless of the number of hours worked; Receives a salary of at lease $455/week or $23,660/year; and Satisfies the duties tests for exempt employees (executive, administration, professional, computer, and outside sales regulations). The DOL proposed increasing the salary threshold from $455 per week to $970 per week ($50,440) annually. The salary threshold for the highly-compensated employee exemption would increase from $100,000 to $122,148 per … Continue reading →