April 28, 2017
Compliance Matters

During the Obama Administration, the United States Department of Labor (DOL) began a rule making process to update and increase the minimum salary needed for a person to qualify for an overtime exemption under the federal Fair Labor Standards Act.  The DOL sought to more than double the minimum salary from $23,660 per year to $47,476 per year.  However, these proposed regulations never went into effect because a federal court issued an injunction late last year halting the implementation of the new rules. The Obama Administration appealed that ruling, but it is widely expected that President Trump will abandon that appeal so that the existing standards never go into effect.

The California minimum salary is a moving target of sorts. Rather than set the minimum salary at a specific dollar amount, the California rule sets the minimum at twice the current minimum wage.   In 2017, the minimum salary threshold for an overtime exemption is $41,600 for employers with 25 or fewer workers and $43,680 for those with 26 or more.  As California's minimum wage rises, so too will this amount. By 2020, California's salary threshold for the overtime exemption will exceed what was to be the new federal rule.

Assembly Bill 1565 proposes to raise the minimum salary in California to the higher of the proposed federal standard of $47,472 ($3,956 monthly) or twice the state's minimum wage rate. Notably, AB 1565 does not distinguish between large and small employers. That means that if the legislation passes, all California employers would be immediately subject to the $47,472 threshold.

We will update you on this important legislative development. You can also set up an alert in Google if you wish to watch it in real time.

If you have any questions about the matters discussed in this issue of Compliance Matters, please call your firm contact at (818) 508-3700 or visit us online at www.brgslaw.com .

Richard S. Rosenberg
Janet S. Soultanian
Ballard Rosenberg Golper & Savitt, LLP

15760 Ventura Blvd.
Eighteenth Floor
Encino, CA 91436
(818) 508-3700

57 West 38th St.
Ninth Floor
New York, NY 10018
Ken Ballard: 
(212) 857-0244

6135 Park Drive South
Suite 510
Charlotte, NC 28210
Matthew Wakefield:
(704) 846-2143 


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