Today the Department of Labor (DOL) increased the minimum salary that employees must make in order to be exempt from overtime requirements under federal law. The increase -- to $35,568 in annualized salary -- is significantly lower than the minimum that the Obama DOL attempted to adopt several years ago.
Federal overtime and minimum wage protections in the Fair Labor Standards Act presumptively extend to all employees. Thus, when an employee is told, "we're going to need you to come in and work on Saturday," the default rule is that those hours will be tracked, extra payment will be made for them, and hours worked over forty in a week (under federal law) will be paid at the overtime rate. There are several so-called "white collar" exceptions to this rule -- one for "professionals" who must undergo significant schooling or training (e.g., doctors and lawyers), one for "executives" with a certain degree of managerial responsibility, and one for "administrative employees" who have discretion to make key decisions for the business. To qualify for those exemptions, an employee must (a) make a minimum salary, and (b) have the type of job duties specified for the exemption in question. The general idea behind the salary requirement is that if an employee may be asked to work increased hours without any corresponding increase in pay, he or she should be making a relatively high amount to begin with.
From 2004 to 2016, the minimum salary was only $23,660. In 2016, the Obama DOL raised the minimum to about $47,000. Just before the rule went into effect, a judge in Texas struck it down, criticizing the process by which it had been adopted (even though the Department of Labor had spent two years working on it and reviewed nearly 300,000 public comments before adopting it).
Now, the Trump DOL has issued a new rule setting the minimum at $35,568. As a matter of policy, this is an improvement, but query whether someone making only $36,000 is paid so well that he or she can be required to work unlimited hours without any increase in pay.
In California, workers are also protected by state wage laws. The minimum salary for overtime exemptions in California is just under $50,000.
William Jhaveri-Weeks is the founder of Jhaveri-Weeks Law, a San Francisco-based civil litigation practice for individuals and organizations. This blog is for informational purposes only, is not legal advice, and may constitute ATTORNEY ADVERTISING. See the disclaimer.