Employment & Labor Insider

BREAKING NEWS:  CALIFORNIA FALLS INTO THE SEA!

Well, not exactly.  But some natural phenomena occur only once or twice in a lifetime—like Halley’s Comet, or the turn of the Millennium, or the Mets winning the pennant.  Another one happened today:  the FLSA has become more protective or workers than California law, which is ordinarily the nation’s statistical outlier in the wage-and-hour world.

This morning President Obama announced final publication of the DOL’s new rules on the white-collar exemptions, which will more than double the minimum salary for exempt employees from $455 to $913 per week.  The new regulations will also index the minimum salary to market rates, and permit employers to satisfy up to 10 percent of minimum salary with nondiscretionary bonuses.

Under California law, the white-collar exemptions require employees to be paid a salary of at least two times the minimum wage for full-time work.  At the present state minimum wage of $10 per hour, white-collar employees must earn at least $800 a week.  California will not catch up with the FLSA until 2019, when the state minimum wage goes up to $12 per hour.

Until then, the earth-shattering conclusion that a California employer could satisfy state overtime regulations, but not the FLSA’s, is conceivable.  For years, California employers have been shocked to learn that their compliance with FLSA does not pass muster under state law.  The reverse was, until now, inconceivable.

All California employers should review the compensation of their exempt employees and plan to bring their operations into compliance. The new federal regulations do not go into effect until December. It’s not too late to avert disaster.