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.