The federal Department of Labor (DOL) has been batting a new minimum salary around for nearly 2 years and the amount has gone up and down. However, they finally came to a decision and passed the law. The new minimum salary for exempt employees will be $47,476 per year ($913/week) and goes into effect on 12/1/2016.
Legally, a minimum salary means it’s the absolute minimum amount you can pay any exempt employee… regardless of how many or how few hours they work in any week or month. Exempt employees are not eligible for overtime and are expected to have higher level job responsibilities and duties.
And that’s exactly why the DOL decided they needed to make this change. The DOL felt too many employees have been misclassified as exempt when they don’t really meet the duties test (the higher level responsibilities and duties). They figured creating a higher minimum salary would force companies to recognize which positions are truly “worthy” of being exempt.
This new minimum will also affect you in a couple of other ways:
(1) If you have been misclassifying your employees and paying them a salary when they should have been hourly, this gives you an opportunity to correct it and blame it on the feds.
(2) Your employees that have been salary and won’t remain salaried will have to start using a timecard and you’ll need to make sure they are taking meal breaks in accordance with CA law.
Going forward, if a position isn’t worth $50,000 to you, bite the bullet and make it a non-exempt (hourly) position.
About Your Columnist
CJ Westrick
CJ Westrick is a featured columnist for Women Taking Charge, the official blog of Connected Women of Influence, where she covers all things human resources and managing people in the workplace. CJ Westrick, SPHR, has been in human resources (HR) management for over 20 years and has maintained her SPHR (Senior Professional in Human Resources) national certification since 2002. She started HR Jungle, a human resources consulting firm, in 2006 to provide senior-level HR expertise to businesses without internal HR.
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