Effec­tive Decem­ber 1, 2016 there will be new FLSA stan­dards which affect the abil­i­ty of orga­ni­za­tions to have an employ­ee be clas­si­fied as exempt from over­time rules. Cal­i­for­nia rules were already stricter but now the salary lim­its have been exceed­ed. The new thresh­old for con­sid­er­a­tion of poten­tial exemp­tion is now $47,476 per year, which com­pares to the pre­vi­ous Fed­er­al thresh­old of $23,660 and the cur­rent Cal­i­for­nia thresh­old of $41,600. A new pro­vi­sion allows up to 10% of the min­i­mum salary to be met by non dis­cre­tionary bonus­es, incen­tive pay or com­mis­sions, if made at least on a quar­ter­ly basis. Cal­i­for­nia rules still apply to duties, where at least 50% of an exempt employee’s work must be spent on exempt duties.

What does this mean? Employ­ers must now iden­ti­fy those posi­tions they con­sid­er to be exempt with salaries below $47,476 – and real­ize that they are no longer exempt.