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More on "exempt" overtime status and possible abuses

A previous post here discussed new overtime rules, which President Obama initiated, that would have fundamentally changed which Los Angeles residents were exempt from mandatory overtime under federal wage and hour laws. The previous post called for a better explanation of California's wage and overtime laws.

It is important to remember that California's wage and overtime laws are a little bit more generous to workers than are the laws of the federal government. For instance, California's minimum wage is currently $10.50 per hour for employers of over 25 people and, in just a few years, every employer in California is going to be expected to pay workers at least $15 per hour for their work.

These higher wages also affect California's overtime rules. Like other states, California requires employers to pay overtime, usually whenever a worker is expected to work more than 40 hours in a week. Like other states, California carves out exceptions for certain employees who typically make salaries instead getting paid by the hour, but these exceptions are a bit narrower than those of the federal government.

For instance, the executive exemption commonly used by employers allows employers to pay a salary and not pay overtime to certain executive and managerial workers, which means, in theory, that employers can require such people to work very long hours for relatively little pay. However, in California, in order to invoke this exemption, an employer has to pay twice the monthly minimum wage.

Doing some math, a good-sized employer in California would have to offer $43,680 a year to an "executive" before the employer could claim the employee exempt from overtime rules and therefore avoid claims of unpaid overtime. While this threshold is less than what the new federal rules would have required, it is quite a bit more than what federal law requires now.

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Law Offices of Allan A. Sigel, P.C.

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