On Thursday March 13, 2014, President Obama announced that he would be implementing changes towards the federal requirements for overtime pay exemptions. Federal law states that certain employees who handle certain tasks and make more than $455 per week (an equivalent of $24,000 a year) are not entitled to receive overtime pay. President Obama signed a memo to increase the salary threshold for overtime exemptions. The memo signed by President Obama did not state what the new salary threshold for overtime pay will be, but the business world is abuzz with the implications.

Federal overtime laws are not the only changes California employers need to be aware of. California state laws require that exempt employees, amongst other requirements, must make at least one and a half times the state minimum wage. Due to the scheduled increase to the state minimum wage effective July 1, 2014, California employers must also be prepared for the other effects. In addition to making sure all employees are paid at least $9.00 an hour, employers must also now ensure that all exempt employees now make at least $13.50 an hour to maintain those overtime exemptions. Not making these changes may expose employers to both minimum wage claims and overtime claims.

To make sure that your company is prepared for the upcoming wage and hour changes contact the attorneys at The Rad Firm for a free consultation.