Question:

There have been a number of news stories regarding the new overtime rules. I currently work and am paid for a large number of overtime hours. I count on my overtime wages to pay my bills. Will these new rules allow my employer to stop paying overtime?

Answer:

Although estimates of the number of workers who will lose their overtime eligibility range from 107,000 to 6 million, the new federal rules will have little impact in California. According to a California Chamber of Commerce spokeswoman, Sara Lee, this is because California Labor law has stricter standards with fewer exemptions from overtime pay requirements than the new federal rules.

The answer to your question is “probably not,” but will depend on whether your employer is covered by the California Wage Orders. Most private employers are covered by these wage orders. If your employer is covered by the California wage orders, the new rules will have little effect on your workplace. This is because, as noted above, the California standards for overtime exemption remain more stringent than the new federal rules.

The new overtime rules bring federal law closer to the more employee friendly California rules. For example, the federal rules require that in order to satisfy the executive exemption, the employee must be someone with the “authority to hire and fire other employees or whose suggestions or recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees, will be given particular weight.” The employee’s primary duty must be managing the enterprise or a recognized department or job division of the enterprise. These requirements are very similar to the requirements of the California managerial exemption.

The new federal rules require that in order to meet the administrative exemption, the employee’s primary duties must include the “exercise of discretion and independent judgment with respect to matters of significance” and must include performing office or non-manual work related to the management or general business operations of the employer or the employer’s customers. This is very similar to the California requirement that employees covered by the administrative exemption, perform similar “office or non-manual work” and “customarily and regularly exercise discretion and independent judgment.”

With respect to the professional exemption, the new federal rules focus on work that is primarily “intellectual in character.” The California rules limit the exemption to employees licensed or certified by the State of California and primarily engaged in the practice of law, medicine, accounting, teaching, optometry, architecture, engineering, dentistry, or in an occupation commonly recognized as a “learned or artistic profession.”

Most significantly, the new federal rules raise the minimum salary to qualify for an overtime exemption to $23,600. This is from a prior minimum salary of $8,060. Under current California law, an employee must make $28,080 per year to qualify for what is known as a white-collar exemption. In addition, under all three of the above exemptions the new federal rules look at the “primary duty” of the employee, while California law requires that the employee spend at least half their time performing exempt work.

As you can see, if your employer is covered by the California Wage Orders, it is unlikely that the new federal overtime rules will require affect your entitlement to overtime.
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