California introduces its own version of the overtime rule
- California lawmakers proposed legislation to raise the salary threshold overtime exemption to $47,476, reports SHRM. The threshold is the same the U.S. Department of Labor proposed but was blocked in the courts late last year.
- California’s threshold is tied to the minimum wage already in place. Every business with at least 26 employees must pay nonexempt workers at least $10.50 an hour and pay exempt employees (executive, administrative and professional workers) at least $3,640 a month, or $43,680 annually. Employers with fewer than 26 workers must pay nonexempt workers at least $10 an hour and exempt workers $41,600 a year.
- The proposal goes to the General Assembly's Labor and Employment Committee on April 19. If enacted, the bill would be effective Jan. 1, 2018.
California often leads the country in adopting change. It’s natural that it would be one of a growing number of states that are proposing and enacting their own progressive employment laws, rather than wait on the federal government to act.
The new federal standard for overtime is currently tied up in the courts, where it may remain depending on how Trump's DOL decides to treat it (though Alexander Acosta, nominee for DOL secretary, is still going through confirmation). It's no mistake that California’s overtime rule mirrors the federal rule proposed under the Obama administration; state leadership has loudly expressed opposition to the Trump administration's policies so far.
SHRM notes that there’s no guarantee pro-business Democrats will support the bill or that Gov. Jerry Brown, also a Democrat, will sign it. The state already has some of the most stringent overtime rules in the country, as well as a slew of wage and hour rules that vary depending on city or locale. If this law passes, California will further push its reputation as one of the most employee-friendly and compliance-heavy states in the country — potentially frustrating employers that want to open offices there.