Firm News & Events

Exempt Employee Salary Requirements

by Bradley J. Levang

May 10, 2024

Question:  I heard the Department of Labor changed the salary threshold for employees who are exempt from overtime pay. Does this mean some of my California employees are now exempt from overtime pay requirements?

Answer:  The new Federal minimum salary for classifying employees as exempt will have little effect on California exempt employees because the California minimum salary for exempt employees is higher than the new Federal salary threshold.

To be properly classified as an employee who is exempt from overtime pay requirements the employee must earn a minimum salary and perform specified exempt job duties. On April 23, 2024, the federal Department of Labor (“DOL”) announced a final rule increasing the minimum Federal salary requirements for classifying executive, administrative, professional, outside sales, and computer employees as exempt from Federal overtime requirements. Beginning July 1, 2024, the Federal regulations will require employees who qualify for these exemptions to earn a minimum salary of $844.00 per week/$43,888.00 per year. Then, on January 1, 2025, that amount will increase again to $1,128.00 per week/$58,656.00 per year.

This announcement prompted many California employers to wonder whether the DOL’s rule will significantly change the minimum salary for exempt employees in California. Importantly, the DOL rule and Federal change in exempt salary minimum will have little impact on the salary requirement in California because the California minimum salary for exempt employees remains higher than the Federal salary requirement.

Both Federal and California laws require the payment of overtime to employees. Likewise, they both provide specific, limited exceptions for excluding certain employees from overtime pay requirements. California employers must comply with whichever overtime laws are more favorable to the employee. Because California’s laws regarding classification of employees as exempt are normally more favorable to employees than Federal law, California employers must follow the California minimum salary requirements and duties tests for exempt employees.

To satisfy California’s minimum salary requirement for exempt executive, administrative, and professional employees, such employees must earn a predetermined minimum monthly salary of at least twice the state minimum wage for full-time employment. This amount changes based on California’s existing minimum wage. Currently, employees must earn a minimum monthly salary of at least $5,546.67, which is an annual salary of $66,560.00. The exempt salary minimum is different for qualifying fast food, healthcare, and outside sales workers, computer professionals, and physicians.

The DOL’s rule also increases the salary minimum for the Federal overtime exemption for highly compensated employees. This Federal exemption applies to employees in high-level, highly compensated positions who are 1) paid at least $684.00 per week, annualized to at least

$107,432.00, 2) primarily performing non-manual work, and 3) customarily and regularly performing at least one of the exempt duties of an exempt executive, administrative, or professional employee. However, there is no California exemption for highly compensated employees. To qualify under California’s executive, administrative, or professional overtime exemptions, the employee must spend at least half of their time performing specific exempt duties. Consequently, the Federal exemption for highly compensated employees is inapplicable to California employees because California’s exemption requirements are more favorable to employees.

California employers should take care when classifying employees as exempt from overtime and be certain to follow the correct law. The exemption analysis is based on both the employee’s salary and specific job duties and is fact dependent.

Read More

Work/Life Balance and the Right to Disconnect

by Ashley Cameron

April 26, 2024

Question:  As an employer, what can I do to help my employees with their work-life balance?

Answer:  In the age of technology and the growing commonality of working from home, the line between work life and personal life can become muddled. Texting, social media, and applications like Slack may provide employees with access to their workplace 24 hours a day; however, such unfettered access can lead to an unhealthy work-life balance, which in turn can result in burnout and lower productivity.

California is currently considering Assembly Bill 2751, which would give employees the “right to disconnect” during nonworking hours. This bill, which would apply to employers of all sizes, would prohibit employers from contacting employees during “nonworking hours,” except in cases of an emergency or scheduling change that would impact the next 24 hours. The bill defines an emergency as an unforeseen situation that threatens an employee, customer, or the public, disrupts or shuts down operations, or causes physical or environmental damage. Absent these exceptions, employees would be able to ignore communications from their employer and co-workers during nonworking time — including days off, holidays, and vacations — without having to worry about repercussions.

Proposed by San Franciso Assemblyman Matt Haney, this bill would require employers to clearly establish an employee’s working and nonworking hours and communicate these hours to employees in writing. In discussing the bill’s purpose, Haney said, “[w]ork has changed drastically compared to what it was just 10 years ago. Smartphones have blurred the boundaries between work and home life. Workers shouldn’t be punished for not being available 24/7 if they’re not being paid for 24 hours of work. People have to be able to spend time with their families without being constantly interrupted at the dinner table or their kids’ birthday party, worried about their phones and responding to work.”  Industries with traditionally late or erratic hours would still be allowed to contact workers during these hours if the working hours and non-contact hours are clearly communicated to employees in writing. Employers who repeatedly violate the law and contact employees during nonwork hours could be subjected to fines.

As currently written, there is no distinction between exempt and nonexempt employees. However, the bill is in its early stages and will likely undergo many changes before its possible enaction.  Several other countries have similar laws, including France, Australia, Argentina, Belgium, Columbia, Greece, Mexico, Portugal, Italy, and Spain. Studies have shown that workers with the “right to disconnect” are healthier, happier, and more productive in the workplace.

Whether AB 2751 is passed or not, California has existing laws that place limitations on how employers communicate with their employees and how to compensate employees for work performed outside of their normal working hours, such as overtime.

In the meantime, employers can help employees in achieving a successful work-life balance by communicating expectations on work schedules and hours. Employers should encourage employees to use accrued vacation and paid time off and encourage them to fully unplug from work during this time off by ensuring workloads are properly delegated in an employee’s absence. Employers can also keep emails and other office communications within the business’ typical office hours.

AB 2751 is still in the committee stages of the legislative process with this year’s legislative session, which ends on August 31, 2024.

Read More

Indoor Heat Illness Prevention Regulations on the Horizon

by Sara Boyns

April 12, 2024

On March 21, 2024, the CalOSHA Standards Board (CalOSHA) unanimously voted to adopt heat illness prevention regulations for indoor places of employment. The implementation of the regulations is currently uncertain (California’s Department of Finance did not sign off on the proposed regulations because of concerns related to the cost of the regulations). Despite this uncertainty, employers should start preparing for the eventual adoption and implementation of indoor heat illness prevention regulations, although the specific requirements of the regulations may change.

History of Indoor Heat Illness Prevention Regulations

In response to employee heat related deaths, in 2005, CalOSHA adopted outdoor heat illness prevention standards applicable to specific industries. In 2016, the California Legislature directed CalOSHA to adopt indoor heat illness prevention regulations based on reports of heat related illnesses and deaths, particularly in the warehouse industry.

As with prior regulatory efforts, the current regulations likely stemmed from recent events.  For example, in July 2023, employees working in an Amazon warehouse in San Bernadino filed a complaint with CalOSHA alleging that the temperature in the warehouse exceeded 100 degrees.  According to their complaint, even with air conditioners in the warehouse and fans near the trucks, the workplace “felt like a sauna.” CalOSHA investigated and found no evidence of safety violations indoors under then existing safety regulations.

Requirements of Proposed Indoor Heat Illness Prevention Regulations

The current proposed indoor heat illness prevention regulations apply to all indoor work areas where the temperature equals or exceeds 82 degrees when employees are present. The regulations do not apply to places of employment where employees are voluntarily teleworking.

Some of the obligations imposed by the proposed regulations include:

• Providing fresh, pure, and “suitably cool” drinking water to employees free of charge. The water must be located as close as practicable to the areas where employees are working and in indoor cool-down areas.
• Maintaining one or more indoor cool-down areas that are large enough to accommodate the number of employees taking recovery or rest periods. The cool-down area(s) must be located as close as practicable to the areas where employees are working. The temperature in indoor cool-down areas must be less than 82 degrees unless the employer demonstrates it is infeasible.
• Allowing and encouraging employees to take preventative cool-down rest periods in a cool-down area when needed to protect themselves from overheating.
• Monitoring employees who are taking a cool-down rest period to detect symptoms of heat illness and allowing such employees to continue to rest until signs or symptoms of heat illness have abated.
• Observing employees during a heat wave or when an employee is newly assigned to a work location where the temperature is 87 or higher, or in a high radiant heat area where the temperature is 82 degrees or more.
• Providing first aid or emergency response to employees experiencing heat illness.
• Establishing an Indoor Heat Illness Prevention Plan that includes procedures for accessing water, close observation, cool-down areas, and emergency response measures.
• Training supervisory and non-supervisory employees about heat related illness and employer procedures for recognizing and responding to heat illness, as well as the elements of the employer’s Indoor Heat Illness Prevention Plan.

Employers should be on the lookout for the finalized regulations and take steps now to prepare to adopt an Indoor Heat Illness Prevention Plan.

Read More

Reproductive Loss Leave

by Gladys Rodriguez-Morales

March 29, 2024

Question: I recently learned there is a new type of leave employees may take concerning reproductive loss. Is this true?

Answer: Yes. In October 2023, Senate Bill (SB) 848 was signed by Governor Newsom, which created a new leave for employees who experience a reproductive loss. Effective January 1, 2024, SB 848, codified in California Government Code section 12945.6, requires employers who employ five or more persons to provide up to five days of protected leave following a reproductive loss event for any of the following losses: (1) failed adoption, (2) failed surrogacy, (3) miscarriage, (4) stillbirth, or (5) unsuccessful assisted reproduction. The reproductive loss leave is distinct from bereavement leave and other leaves available under state and federal law. As such employers need to review and update their leave policies and be aware of the following concerning reproductive loss leave: 

1. Entitlement to and Duration of Reproductive Loss Leave.

Employees who have been employed by their employer for at least 30 days prior to the commencement of the leave are entitled to take reproductive loss leave. Employees are entitled to take up to five days following the loss. Employees cannot be required to take the five days consecutively, but the leave must be completed within three months of the reproductive loss. Employees can take up to five days for each qualifying reproductive loss, but employers are not required to provide more than 20 days of reproductive loss leave within a 12-month period.

Employees entitled to reproductive loss leave include employees who would have been the parent of (1) the adoptee had the adoption been completed, (2) the child born as a result of surrogacy, a natural or assisted pregnancy (i.e., intrauterine insemination or embryo transfer), or (3) a pregnancy that ended in stillbirth.

2. Overlapping Leave Rights.

Reproductive loss leave is a separate and distinct leave provided to eligible employees in addition to other leaves like Bereavement Leave, Pregnancy Disability Leave and Family Medical Leave. For example, an employee may be taking leave for the employee’s own medical condition or the condition of a family member under the California Family Rights Act (CFRA) or the Family and Medical Leave Act (FMLA) either before or after a reproductive loss event. An employee who experiences a reproductive loss would be eligible for an additional five days of reproductive loss leave within three months of the end of the employee’s CFRA or FMLA leave.

3. The Reproductive Loss Leave May be Paid or Unpaid.

Employers are not obligated to pay employees for reproductive loss leave. However, employers need to permit employees to use any accrued and available sick leave, vacation time, personal time off, or any other paid time off that the employer offers. Employers who have an existing reproductive leave policy but offer less than five days of leave should update their policy to indicate that employees are entitled to five days.

4. Confidentiality and Documentation.

Employers must maintain confidentiality of the identity of an employee requesting reproductive loss leave and all information provided by the employee, except to internal personnel as necessary for business purposes. Although the law is silent regarding an employer’s ability to request documentation from the employee regarding their need for the leave, it is recommended that employers not ask for documentation concerning the reproductive loss. If the employee provides documentation, it must be maintained confidentially.

Read More