Compliance Stuff

Each year, California’s  minimum wage rises,  but along with hourly workers’ wages increasing, so too does the salary threshold for employees to be exempt from overtime. For an employee to be exempt from overtime under California law, their job must fall into a specific exempt category and meet a designated wage rate. The most common exemptions are for executive, administrative, and professional roles. Employees in these capacities generally qualify if their work meets detailed requirements and they earn at least twice the state minimum wage for full-time employment. In 2026, exempt employees will increase from $68,640 to $70,304 per year on January 1, 2026, in accordance with California’s requirement that exempt employees must earn at least twice the state minimum wage for full-time work (40 hours per week, 52 weeks per year). For certain exempt categories, however, the Department of Industrial Relations sets increases based on changes to the California Consumer Pri...

A federal judge in Texas seemed skeptical that the U.S. Department of Labor (DOL) did not overreach with its latest rule that raised the minimum salary thresholds to the Fair Labor Standards Act’s (FLSA) white-collar overtime exemptions during arguments in a challenge by the state of Texas and several business organizations seeking to block the rule nationwide. Quick Hits A federal judge in the U.S. District Court for the Eastern District of Texas held oral arguments on cross motions for summary judgment in a challenge to the DOL’s rule that raised the minimum salary to be exempt from the FLSA’s overtime pay requirements. The state of Texas and a group of business organizations are seeking to expand a preliminary injunction to block the DOL’s overtime rule on a nationwide basis. Among other things, the rule will increase the minimum salary to be exempt to the equivalent of an annual salary of $58,656 on January 1, 2025. On November 8, 2024, U.S. District Judge Sean Jordan for the East...

On September 11, 2024, the U.S. Court of Appeals for the Fifth Circuit joined four other federal courts and held that the U.S. Department of Labor (DOL) has statutory authority to impose a minimum salary threshold to qualify for the executive, administrative, and professional overtime exemptions (EAP Exemption) under the Fair Labor Standards Act (FLSA ).  Mayfield and R.U.M. Enterprises, Inc. v. U.S. Dep’t of Labor , No. 23-507-24 (5th Cir. Sept. 11, 2024) . The Fifth Circuit’s decision was in response to a legal challenge related to the 2019 DOL Final Rule on overtime pay, which increased the minimum salary requirement for the EAP Exemption . While seen as a win for the DOL in its effort to enforce its more recent 2024 Final Rule, the ruling does not address the validity of the 2024 Final Rule, and leaves open other possible challenges to the 2024 Final Rule. Overview of the DOL Minimum Salary Rules In 2019, the DOL promulgated a new version of its “Minimum Salary Rule,” raising t...