LAW OFFICES OF

TODD M. FRIEDMAN, P.C.

OVERTIME: Are You Eligible Under Expanded Federal Regulations?

Presented By

Federal employment law protects basic things – for those who may soon be shifted from exempt to

nonexempt (hourly) these include meal breaks and

overtime pay. At the Law Offices of Todd M. Friedman, P.C., we provide an overview of the new

minimum salary rules.

California traditionally has had more protective labor laws, but this will soon change as the federal

minimum salary requirement leapfrogs the current

state requirement of $41,600 (two times the state minimum wage).

This presentation discusses a new rule that increases the threshold salary for exempt employees from

$23,660 to $47,476. We explain:

Why the change was needed

How to know if you are affected

What options exist for your employer to comply

When changes need to happen

Overtime is paid at one and one-half times your typical hourly wage. Salaried workers have generally not been

eligible for overtime, if paid a salary over a certain

amount. The last update to this salary threshold was more than 10 years ago in 2004. The 2016 increase was

supported by wage Census Region data. New rules

also require updates every three years.

Salaried mid-level managers in food service and retail, entry-level accountants, administrators in

human resources and higher education along with

state government employees will see changes if they:

Earn less than $47,476; and

Work more than 40 hours each week.

This salary figure was not pulled out of thin air. It is the 40th

percentile for a salaried worker in the lowest wage region in

the country (the South) and less than the initially proposed

amount of $50,400.

Estimates suggest that the rule change will affect more than 4 million salaried employees across the

country. Slightly more women and those with college

degrees will benefit. For families, it could make a huge difference, allowing time to cheer on a child at a

sports event or pay for a longer vacation.

Percentage Of Salaried Workers Affected By New Rules

Are commissions or bonuses included when calculating if a

salary rises above the minimum?

This is one area of conflict between state and federal law.

Federal regs allow commissions

or bonuses to make up 10 percent. But state law does not

allow these payments to be

included.

In California, a base salary must

be at $47,476 or above to qualify

a position for exempt status.

Employers have several options. These include:

Increase a base salary to meet the new minimum.

Balance workloads so those who earn a salary below

the threshold no longer have to work overtime.

Convert a position to hourly wages (tracking hours

and providing meal/rest breaks would be required).

The rules go into effect on December 1, 2016.

In late September, the House passed a bill

that would delay the rule for another six

months. Even if the measure also passed

the Senate, the president has indicated he

would veto it. Twenty-one states have sued

the administration, arguing the rule would

place a burden on state budgets. This

lawsuit and another filed by the Chamber

of Commerce are unlikely to delay

implementation.

Your employer cannot punish you for raising the salary issue. The law prohibits employer retaliation. If

you are demoted after bringing up the issue, you may

have a basis to bring a lawsuit seeking compensation and reinstatement to the prior position.

The number of salaried

employees entitled to overtime

pay has fallen to 7 percent from

62 percent in 1975.

These rules put fair pay back at

the forefront. If you work in a

salaried position, take the time to

understand what this means

for you.

1975

TODAY

62%

7%

THE NUMBER OF SALARIED EMPLOYEES ENTITLED TO

OVERTIME HAS FALLEN

Free White Paper

Read our white paper

to learn what issues you need

to watch for as the law goes

into effect. If your employer

refuses to take any action in

advance of the December

deadline, you may have legal

remedies.

© 2016 Law Offices of Todd M. Friedman, P.C. All rights reserved. Design and editorial services by FindLaw, part of Thomson Reuters.

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