On November 22, 2016, a federal district judge in Texas issued a nationwide injunction enjoining implementation of the Department of Labor’s new regulations raising the minimum compensation that must be paid employees in order for them to be exempt from overtime pay under the executive, administrative, and professional exemptions contained in the federal Fair Labor Standards Act (FLSA). Currently, in order for the so-called “white collar” exemptions to apply, an employee must be paid a minimum annual salary of $23,660. This figure was set to increase on December 1, 2016 to $47,476. With the issuance of a nationwide injunction today, implementation of the DOL’s new regulations will be delayed. Implementation of the new regulations could be permanently enjoined depending upon the outcome of that case.
California employers should be reminded that the minimum compensation for application of the white collar exemptions under state law is two times the minimum wage for full time employees. With the California minimum wage set to increase to $10.50 on January 1, 2017, the minimum annual compensation exempt employees under California law will rise to $43,680.
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