California Pushes Ahead with Overtime Rule

April 11, 2017 Andrew Larsen

Some lawmakers in California are attempting to revive the stalled Federal Labor Standards Act (FLSA) by proposing A.B. 1565 to the Assembly’s Labor and Employment Committee on April 19. Like the FLSA before it, A.B. 1565 would raise the salary threshold for employees exempt from overtime pay to $47,476.

Currently, California calculates its exempt salary threshold by doubling the minimum wage. With California already setting plans to raise the minimum wage to $15 by 2022, this means that within a few years, California’s threshold will naturally pass $47,476. This begs the question, why are some California lawmakers so eager to push laws through now that may become insignificant in a few years?

James McDonald Jr., an attorney with Fisher Phillips says, “It is more symbolic than anything. California’s legislature is so opposed to the current administration in Washington that it will likely try to put back for employees whatever the federal government takes away.” Employers can expect that as federal labor laws change, so too will California’s. Because of this businesses with a workforce in California will need to walk the tightrope of compliance between federal and state labor laws. The need for the constant monitoring of legislature and implementing the right controls to ensure compliance will become a necessity for these employers.

If A.B. 1565 passes, it would presumably take effect on Jan. 1, 2018. At that time, employers would be required to adhere to some of the same procedures expected of the FLSA. 

As it stands, California requires employers with fewer than 25 employees to provide nonexempt employees at least $10 hour and pay exempt employees at least $3,467 per month. Employers with 26 or more employees must provide nonexempt workers $10.50 an hour and exempt workers $3,640 per month.

While California pushes ahead with its own overtime rule, the FLSA continues to be stalled. On Nov. 22, 2016, a federal district court judge in Texas placed a temporary injunction on the rule. Yet, even while the FLSA sits cold, states like Georgia and California are pushing ahead with their own bills to see that the policies of the FLSA continue forward.

About the Author

Andrew Larsen

Andrew is the Marketing Communications Specialist for Zuman, the one solution for HR, payroll, and benefits administration that supports growing small to midsize businesses.

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