You may recall that last year the US Department of Labor (DOL) adopted a rule that any employee who is considered exempt under the Fair Labor Standards Act must make at least $47,476 per year. That rule was to become effective December 1, 2016. However, a court injunction blocked that rule from becoming effective on November 22, 2016.
For the first time in recent history, this Federal ruling actually went further than California employment law which mandates an annual salary threshold of two times the current minimum wage, or $43,680 per year. (Some cities and counties have adopted their own minimum wage that will affect this threshold).
After speculation about whether the DOL would appeal the injunction, the DOL decided on June 30, 2017 to revisit the subject by opening a new rule making period, therefore abandoning the prior rule.
So….here we go again. It is certain that an increase in the Federal minimum wage paid to exempt employees will happen. What it will end up being is yet to be determined. Also, the California state legislature is considering raising the state threshold, independent of Federal rule making.
Your input as business owners is critical to this decision. If you do not know how to make your voices heard, please contact me with your examples of how changes to the salary threshold for exempt employees will affect you. I will convey your stories, anonymously, to elected officials.