California workers enjoy some of the best labor laws in the country. Even so, there is one area where many workers felt the laws fell short: overtime pay. The Obama administration did make attempts to change this, making millions more people eligible for overtime pay on a federal level. However, several states pursued legal action and a federal judge blocked the proposal.
Inc. points out that the current threshold for overtime pay is $23,660. Workers who make more than this were not eligible for overtime pay. The Obama administration tried to increase this to $47,500. Now, the Trump administration plans to increase it to $35,300 by 2024.
Note that states may also set their own thresholds and the more favorable one takes effect. California’s threshold is climbing up to a whopping $62,400. Washington plans to go all the way up to $79,872. Because of these initiatives taken at the state level, millions of Americans may soon become eligible for overtime pay.
NPR estimates that on its own, the federal law accounts for about 1.3 million of the workers who may now receive overtime pay. It also estimates the new threshold a little higher at $35,568. Still, critics of the law who supported the original proposal from the Obama administration say the new ruling falls well below the more than four million people that would have received overtime pay. The thwarted ruling and the new federal threshold may account for why so many states decided to take matters into their own hands.
Not all businesses in California are subjected to the increasing threshold. Smaller businesses may remain exempt for some time. Workers employed by small businesses should double-check whether or not their company employs enough people to meet the new overtime pay requirements.