Starting on December 1, the Department of Labor’s new overtime rules will officially go into effect. Known as 29 CFR 541, the law has been adapted to double the minimum annual compensation requirements for classifying executive, administrative and professional (EAP) salaried employees as exempt from overtime pay. The new rules will have national implications, but how will they specifically affect workers in California?
In the Daily Journal article “New federal overtime rules set to take effect in December,” Partners David Harris and Yvette Davis explain that California will not see a large number of workers suddenly eligible for overtime, simply because the state already had broader requirements for employees entitled to overtime.
“The increase in the federal minimum threshold will result in the reclassification of a group of formerly exempt employees. How large this group will be is unknown, but it will certainly be substantially less than in other states that only followed the federal rules,” Harris and Davis wrote.
As for what employers should do in the short term, if a currently exempt EAP employee’s salary is close to the new threshold of $47,476, it’s worth considering raising their salary to maintain their exempt status.