Dive Brief:
- All eyes have been focused on the the salary threshold for exempt status under the new federal overtime rule, whose threshold will be higher than every state's wage and hour law thresholds.
- SHRM notes that deciding whether a job falls under the white-collar exemption (executive, administrative or professional) salary level is not the only metric. There is also the duties test for the specific exemption, which may be more restrictive under certain state laws than under federal law.
- As of Dec. 1, exempt employees (no overtime required) nationwide must be paid at least $47,476 annually or be converted to nonexempt status and paid overtime. Before this latest Labor Dept. rule, there were states that had thresholds higher than the existing level of $23,660.
Dive Insight:
While the FLSA exemptions, for example, examine whether an employee's primary duties include the "exercise of discretion and independent judgment with respect to matters of significance," California law applies a quantitative test, which requires employees to spend more than one-half of their time "primarily engaged" in exempt duties.
With that, employers should check both federal and state law in determining exempt from non-exempt status. In every case, the employee is entitled to the law (state or federal) that offers the most protection. And with the FLSA threshold being adjusted every three years, it's also a smart move to consistently monitor for compliance.