Interplay of Federal and State Employment Law

This year marks an unprecedented number of new state legislation on both the federal and state level. We looked at three states where we do business to cross-reference around hot topics like overtime, paid sick leave and minimum wage. In some cases, state law is at odds with federal law, and vice versa. Companies will update their policies in order to stay compliant, only to have upcoming legislation bring on different requirements.

We sat down with Evan Dwin, employment law attorney, who said, “Compliance is the best line of defense. Companies should meet with legal counsel to do what they should already be doing on an annual basis–update their employee handbook.” What is clear is the wave of change. With recognition on all levels of the organization, operationally and strategically, staying on top of the employee law landscape is possible.

Overtime Compensation

New overtime rules could affect entire IT teams from desktop support to C-suite executives, basically, every role at every salary level. For the first time since 1975, the U.S. Department of Labor (DOL) is increasing the salary threshold to reflect 21st century national salary percentile and inflation. Under new laws, any employee who makes up to $47,476 annually (or $913 weekly) will qualify for overtime. Read our post on What You Need To Know About New Overtime Regulation >

Highly Compensated Employee (HCE) Exemption

Notice that HCE is a federal law, yet states like California, Missouri and New York do not recognize the exemption. As of December 1, 2016, HCEs are employees who make $134,000 or more are exempt from overtime pay. At the date of this post, the current level for HCE status is $100,000.

According to the Department of Labor,

A highly compensated employee is deemed exempt under Section 13(a)(1) if:

1. The employee earns total annual compensation of $100,000 or more, which includes at least $455 per week paid on a salary basis;

2. The employee’s primary duty includes performing office or non-manual work

3. The employee customarily and regularly performs at least one of the exempt duties or responsibilities of an exempt executive, administrative or professional employee. Thus, for example, an employee may qualify as an exempt highly-compensated executive if the

See the DOL fact sheet on HCE >

Paid Sick Leave

While there are no federal paid sick leave requirements, paid sick leave is a reality for employers in states like California. Remember that paid sick leave varies from city to city, and is not a county-wide ordinance. The chart we pulled together below shows what the City of Los Angeles requires of employers vs. Santa Monica, which is within Los Angeles County. It gets tricky, so check with your Human Resources Department to stay in compliance. See An Example of City Paid Sick Leave Ordinances in Southern California >

Minimum Wage

A driving force in employment legislation is the gradual increase in the minimum wage, on both the state and federal level.

Since 2013, about 50 cities and localities have raised the minimum wage — including Lexington, KY; Santa Fe County, NM; and Oakland, CA. At the federal level, the Obama Administration has expressed support for the Raise the Wage Act proposed by Senator Murray and Representative Scott, which would increase the minimum wage to $12 by 2020.

All of the content on this page is for informational purposes only and should not be construed as legal advice. You should always contact your attorney to determine if this information, and your interpretation of it, is appropriate to your particular situation.