What you need to know
An update to the Federal overtime requirements will mean changes to California employees, effectively raising the minimum salary levels for exempt employees.
Until this change, California requirements pertaining to minimum salary levels had exceeded the Federal standard. This will change as of 12/01/16.
Employee categorized as exempt must pass both the Federal salary test and California’s more stringent duty test to be properly classified as exempt.
The minimum salary level for an exempt employee will increase to $47,476 annually to meet the new minimum as of 12/01/16.
Understand that paying the minimum salary does not by itself qualify an individual for exempt status. The job duties and the amount of time spent performing those duties are the deciding factors.
First step is to review those employees who will be affected by the new minimum. Executive, administrative and professional employees who currently do not meet the pending minimum will require scrutiny.
This change affords an employer an opportunity to review the current classification and perhaps make changes. Upon review you have an option to increase the salary to meet the new salary threshold, or, change classification.
Keep in mind that the pending changes to California’s minimum wage will also become a factor as of January 2019, when the California salary test will once again exceed the Federal level.
Whether you decide to go forward with the increase or change classification, factors such as cost, employee morale and operations should be considered.
Avoid costly mistakes by reviewing your options with the Human Resource Department of OmegaComp HR. Please contact us at (888) 540-0752 or email to: firstname.lastname@example.org