California Labor &
Employment Law Blog

Mar. 31 2017

California Seeks to Raise Minimum Salary for White Collar Exemptions

Topics: New Laws & Legislation, Wage & Hour Issues

The minimum salary to qualify for a "white collar" overtime exemption in California has been higher than that required under federal law for many years.  Because California's exempt salary threshold is tied to the state minimum wage (an exempt employee generally must earn a salary of at least two times the state minimum wage), it goes up as California's minimum wage goes up.  The current minimum salary for exempt executive, administrative, or professional status in California is $43,680 per year.  However, as employers know, last year the federal Department of Labor enacted regulations increasing the minimum salary to qualify for exempt status under the federal Fair Labor Standards Act ("FLSA") to $47,476 per year.  California employers would have had to comply with the higher salary threshold under the FLSA, except that the regulations were blocked by a Texas court late last year.  The Texas court's ruling is now on appeal, but most believe that the overtime regulations will not be reinstated -- at least in current form -- under the Trump administration.

California is now seeking to accomplish what the Obama administration could not accomplish at the federal level, by proposing to raise the minimum annual salary to qualify for exempt status in California to $47,472.  AB 1565 (Thurmond) is a spot bill that was amended on Tuesday to propose the salary hike.  Under the bill, the minimum salary for exempt executive, administrative, or professional workers would be $47,472 or twice the state minimum wage, whichever is greater. As California's minimum wage continues to rise, a salary of twice the state minimum wage eventually will be a number greater than $47,472. Until that time, $47,472 would be the minimum salary for exempt status in California.

This is brand new proposed legislation, and it remains to be seen whether it will pass.  We will keep you posted of developments on this issue.

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For over 20 years, CDF has distinguished itself as one of the top employment, labor and immigration firms in California, representing employers in single-plaintiff and class action lawsuits and advising employers on related legal compliance and risk avoidance. We cover the state, with five locations from Sacramento to San Diego.

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About the Editor

Robin Largent represents employers, including major food and retail companies, in all types of employment litigation: wrongful termination, retaliation, breach of contract, wage and hour (California Labor Code) and unfair competition. She also regularly counsels and advises California employers on issues of compliance with California and federal employment laws.
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