October 10, 2016
FLSA: Employees Must Earn More To Qualify For Overtime Exemption
The U.S. Department of Labor’s long-expected amended regulations to the Fair Labor Standard Act (“FLSA”) will become effective on December 1, 2016. Under these new regulations, employees across the nation must earn at least $913 per week (or $47,476 annually) in order to qualify for any of the “white collar” (executive, administrative or professional) overtime exemptions. This minimum salary will be adjusted annually to an amount equal to the 40th percentile of weekly earnings for full-time salaried workers. Although lawsuits have been filed seeking to block the regulations, at this time, employers should be prepared for implementation on December 1.
Under existing law, in order to be properly classified as exempt from overtime under any of the white collar exemptions, an employee must meet both a duties test (i.e., his or her primary job duties must meet certain minimum requirements) and a salary basis test (i.e., he or she must be paid a fixed salary each week that is not subject to deduction based on the quantity or quality of work). For many years, the minimum weekly salary to meet the FLSA salary basis requirement was only $455 per week.
The new FLSA regulations also increase the minimum annual salary for so-called “highly compensated employees” from $100,000 to $134,004. Under the federal regulations, “highly compensated employees” are subject to a less stringent “duties test” than is ordinarily applied to meet the white collar exemptions. (California does not have a similar rule for highly compensated employees and, in all cases, applies a more stringent duties test than is applied under the FLSA.)
In light of the new regulations, prior to December 1, all employers should review the salaries paid to exempt employees. If any “white collar” exempt employee is paid less that the new minimum of $913 per week, the employer must either increase the employee’s salary to the new minimum or begin treating that employee as hourly, non-exempt.
Of note to California employers, the California minimum salary is set at twice the state’s minimum wage times 40 and is currently $800 per week. Effective December 1, the federal minimum salary for “white collar” employees will for the first time exceed California’s salary requirement. However, because the California minimum wage is scheduled to increase annually through 2022, the minimum salary requirement also will increase and may at some point in the next few years exceed the FLSA minimum. Thus, California employers will need to insure that their white collar exempt employees are earning no less than the more generous of the federal and state minimums. The upcoming California rates are as follows:
| Year | CA Minimum Wage for Hourly, Non-exempt | CA Minimum Salary for White Collar Exemption |
| 2017 | $10.50 per hours | $840 per week |
| 2018 | $11.00 per hour | $880 per week |
| 2019 | $12.00 per hour | $960 per week |
| 2020 | $13.00 per hour | $1040 per week |
| 2021 | $14.00 per hour | $1120 per week |
| 2022 | $15.00 per hour | $1200 per week |
OSHA: Incident Reporting and Electronic Posting of Data
The Department of Labor’s Occupational Safety and Health Administration (OSHA) has revised its Recording and Reporting Occupational Injuries and Illnesses regulations. Currently most employers are required to maintain OSHA Forms 300A (“Summary of Work-Related Injuries and Illnesses”), 300 (“Log of Work-Related Injuries and Illnesses”), and 301 (“Injury and Illness Incident Report”). Under new regulations, effective January 1, 2017, in addition to maintaining these records, employers will be required to be electronically submit them to OSHA. OSHA will index and publish the submitted information on a yet-to-be-established web portal that will be available to the public. (OSHA will remove all personally identifiable information associated with the data before it is published online.)
Electronic submission will be required of most employers with 250 or more employees. In addition, employers with 20 or more employees in specified more hazardous industries also will be required to electronically submit Form 300A to OSHA annually. (These industries are listed here).
Below is the compliance schedule for electronic submission under the revised regulations.
Establishments with 250 or more employees that are currently required to maintain OSHA injury and illness records must electronically submit information as follows:
OSHA Form 300A — Summary of Work-Related Injuries and Illnesses.
- 2016 Data must be electronically submitted by July 1, 2017
- 2017 Data must be electronically submitted by July 1, 2018
- Beginning in 2019 and each subsequent year, the required information must be submitted by March 2.
OSHA Forms 300 — Log of Work-Related Injuries and Illnesses.
- 2017 Data must be electronically submitted by July 1, 2018
- 2018 Data must be electronically submitted by March 2, 2019
OSHA Form 301 — Injury and Illness Incident Report.
- 2017 Data must be electronically submitted by July 1, 2018
- Beginning in 2019 and each subsequent year, the required information must be submitted by March 2.
Establishments with 20-249 employees in the above-noted industries with historically high rates of occupational injuries and illnesses must electronically submit OSHA Form 300A as follows:
- 2016 Data must be electronically submitted by July 1, 2017
- 2017 Data must be electronically submitted by July 1, 2018
- 2018 Data must be electronically submitted by March 2, 2019
Some states, such as California, operate under an OSHA-approved State Plan. Under the revised regulations, state agencies, such as Cal-OSHA, have until November 2016 to adopt requirements substantially identical to the revised federal regulations.
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