rss.shrm.org | Leah Shepherd
California’s law on overtime pay differs substantially from the proposed rule on overtime pay recently issued by the U.S. Department of Labor, so employers will need to pay close attention to the details of both to remain in compliance.
It’s important to understand that federal law does not pre-empt state law on overtime pay. “This means that the most employee-favorable law, whether arising under state or federal law, will apply,” said John Skousen, an attorney with Fisher Phillips in Irvine, Calif., and Dallas.
Complexities in Calculating Overtime Pay
The federal Fair Labor Standards Act (FLSA) simply requires employers to pay one-and-a-half times the regular rate of pay for all hours worked over 40 hours in a workweek.
In California, overtime must be paid at one-and-a-half times the regular pay rate for hours worked over eight in a workday or over 40 in a workweek. In addition, California employers must pay overtime at double the regular pay rate for hours worked beyond 12 hours in one day and for all hours worked beyond eight hours on the seventh consecutive day of work in one workweek.
Employers also need to ensure that they apply overtime exemptions properly.
Under the DOL proposal, the annual salary threshold to qualify for a white-collar exemption would increase from $35,568 to $55,068. The salary threshold to qualify for a highly compensated employee exemption would increase from $107,432 to $143,988.
The overtime threshold in California is twice the state minimum…
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