Have you heard about the New White Collar Overtime Rules?
The United States Department of Labor (“DOL”) increased the annual salary minimum that permits a company to classify a typically white collar, salaried employee as exempt from $455 per week (i.e., $23,660 per year) to $913 per week (i.e., $47,476 per year). So, under the new DOL rule, by December 1, 2016, an exempt California employee will have to be making a base salary of at least $47,476 to qualify as exempt for purposes of overtime and minimum wage laws.
Not surprisingly, while the response to this un-American and utterly anti-business rule from business owners/employers has been largely negative, the executive branch has politicized the issue, framing it as an “us v. them” debate. Lost in the shuffle, however, will be the consequences of the rule.
David French, senior vice president for the National Retail Federation, stated it most succinctly when he called the rule “. . . a career killer.” However, aside from the very real possibility that this rule will discourage employers from promoting their employees, it is clear that the DOL’s rule will also result in California employers having to not only spend more money on their work force, but it will also force employers to navigate even more bureaucratic red tape.
Either way, now may be a good time for employers to review their employee rosters to determine whether their exempt employees are properly classified as exempt. Of course, to ensure such compliance, employers should sit down with a competent business lawyer before the new law starts to impact the way they conduct business.
After graduating Phi Beta Kappa from Berkeley and attending law school at UCLA, Michael Kushner started practicing law in Orange County. Now, more than 17 years later, Mr. Kushner is a top rated business and corporate attorney in Orange County, a frequent lecturer on a variety of business, corporate, and employment related matters, and one of the most highly regarded attorneys featured on Bill Handel’s (KFI AM 640) handelonthelaw.com.
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