The blocked federal overtime rule changes create confusion for Los Angeles workers, but understanding current exemption standards and California’s stronger protections remains crucial for ensuring you receive proper overtime pay.
Table of Contents
- What Happened with the Federal Overtime Rule
- Current Federal Overtime Exemption Standards
- California’s Overtime Laws Remain Stronger
- Who Must Receive Overtime Pay
- Common Overtime Violations and Misclassification
- Calculating Overtime You May Be Owed
- How to Challenge Misclassification
- How Law Offices of Todd M. Friedman, P.C. Can Help
What Happened with the Federal Overtime Rule
On November 15, 2024, a judge from the US District Court for the Eastern District of Texas issued a decision invalidating the entirety of the DOL’s overtime final rule. The Department of Labor had planned to significantly increase the minimum salary required for employees to be classified as exempt from overtime pay.
The Planned Increases (Now Blocked):
The DOL’s rule would have:
- Increased the salary threshold to $844 per week on July 1, 2024
- Further increased it to $1,128 per week ($58,656 annually) on January 1, 2025
- Raised the highly compensated employee threshold to $151,164 annually
- Implemented automatic updates every three years
The Court’s Ruling:
In invalidating the rule, the court stated that although the DOL has the authority to define and delimit the terms of the overtime exemption, “that authority ‘is not unbounded.'” The court found that the DOL exceeded its authority by making salary, rather than job duties, the primary determinant of overtime exemption status.
Current Federal Status:
With the rule invalidated, the federal overtime exemption salary threshold remains at the 2019 level: $684 per week ($35,568 annually) for executive, administrative, and professional (EAP) employees.
Current Federal Overtime Exemption Standards
To be exempt from overtime under federal law, employees must meet ALL three of these tests:
Salary Basis Test:
Must be paid a predetermined, fixed salary that doesn’t vary based on quality or quantity of work performed. With limited exceptions, salary cannot be reduced based on variations in work.
Salary Level Test:
Must earn at least $684 per week ($35,568 annually). This is the threshold that was going to increase but now remains at the 2019 level.
Duties Test:
Must primarily perform executive, administrative, or professional duties as defined by federal regulations:
Executive Exemption:
- Primary duty is managing the enterprise or a department/subdivision
- Regularly directs the work of two or more employees
- Has authority to hire/fire or recommendations are given particular weight
Administrative Exemption:
- Primary duty is office or non-manual work related to management or general business operations
- Exercises discretion and independent judgment on significant matters
Professional Exemption:
- Primary duty requires advanced knowledge in a field of science or learning
- Knowledge customarily acquired through prolonged specialized instruction
Critical Point: ALL three tests must be met. If an employee fails any one test, they must receive overtime pay for hours over 40 per week.
California’s Overtime Laws Remain Stronger
Many states have their own salary and duties tests for determining whether an employee is exempt from overtime under state rules. Generally, if state law is more protective (i.e., requires a higher salary amount or has duties tests that are more difficult to satisfy), then state law should be followed.
California law provides stronger protections that apply regardless of federal court rulings:
Higher Salary Thresholds:
For 2025, California requires exempt employees to earn at least:
- $68,640 annually ($5,720 monthly) for employers of all sizes
- This is double the current federal threshold
Stricter Duties Tests:
California’s duties tests are more restrictive than federal standards:
- Executive exemption requires spending more than 50% of time on exempt duties
- Administrative exemption has narrower definitions
- Professional exemption requires licenses for many occupations
Daily Overtime:
California requires overtime pay for:
- Hours over 8 in a workday (not just over 40 in a week)
- Hours over 40 in a workweek
- First 8 hours on the 7th consecutive day of work
Double Time:
California requires double-time pay for:
- Hours over 12 in a workday
- Hours over 8 on the 7th consecutive day of work
Meal and Rest Break Premiums:
California requires premium pay when employers fail to provide required meal or rest breaks—an additional layer of protection not available under federal law.
Who Must Receive Overtime Pay
Despite the blocked federal rule, many Los Angeles workers should be receiving overtime:
Clearly Non-Exempt Employees:
- Hourly workers
- Employees earning less than $68,640 annually (in California)
- Workers whose duties are primarily manual or routine
- Most retail and service employees
- Production and maintenance workers
Commonly Misclassified Employees:
- “Assistant managers” who primarily perform non-exempt duties
- Office workers with administrative titles but routine duties
- “Supervisors” who don’t actually supervise others
- Employees with exempt titles but non-exempt duties
- Workers earning above federal threshold but below California threshold
Industry-Specific Considerations:
Certain industries have unique overtime rules:
- Healthcare: Special rules for hospital employees
- Agriculture: Different overtime thresholds
- Commissioned sales: Specific exemption requirements
- Computer professionals: Specialized exemption with high salary requirements
Common Overtime Violations and Misclassification
Los Angeles employers commonly violate overtime laws in several ways:
Misclassification as Exempt:
- Giving employees “manager” or “supervisor” titles without exempt duties
- Claiming administrative exemption for clerical workers
- Relying solely on salary level without analyzing duties
- Applying outdated or incorrect exemption standards
Salary Threshold Violations:
- Paying less than $68,640 annually while claiming exempt status
- Failing to update salaries when thresholds increase
- Pro-rating salary for part-time workers (not permitted for exemption)
Off-the-Clock Work:
- Requiring work before clocking in or after clocking out
- Unpaid prep time or cleanup duties
- Mandatory meetings or training without compensation
- Requiring employees to work through breaks
Miscalculating Overtime Rates:
- Using base rate instead of regular rate (which includes certain bonuses and premiums)
- Failing to include non-discretionary bonuses in overtime calculations
- Incorrect double-time calculations
Independent Contractor Misclassification:
- Treating employees as contractors to avoid overtime obligations
- Using ABC test incorrectly under California law
- Ignoring degree of control exercised over workers
Calculating Overtime You May Be Owed
If you’ve been misclassified or denied overtime, you may be owed substantial back pay:
Basic Calculation:
- Identify all hours worked over 8 per day and 40 per week
- Calculate regular rate (total compensation ÷ total hours)
- Multiply overtime hours by 1.5 times regular rate
- Multiply double-time hours by 2 times regular rate
- Subtract any overtime actually paid
- Calculate for entire limitations period (typically 3 years in California)
Additional Damages:
- Waiting time penalties if overtime wasn’t paid upon termination (up to 30 days wages)
- Meal and rest break premiums
- Pay stub violation penalties
- Interest on unpaid amounts
- Attorney fees and costs
Example:
Employee misclassified as exempt, earning $60,000 annually ($1,154/week), regularly works 50 hours per week:
- Below California threshold ($68,640) = not exempt
- Regular rate: approximately $23/hour
- 10 hours overtime per week × $34.50 (1.5 × $23) = $345/week
- Over one year: $345 × 52 = $17,940 in unpaid overtime
- Over three years: potential recovery exceeds $50,000
How to Challenge Misclassification
If you believe you’re misclassified and owed overtime:
Gather Evidence:
- Job description and actual duties performed
- Time records showing hours worked
- Pay stubs and salary information
- Communications about job responsibilities
- Comparison to other employees’ classifications
Document Your Duties:
Keep a log of:
- Daily tasks and time spent on each
- Supervisory responsibilities (if any)
- Level of discretion exercised
- Independent judgment required
Understand Your Classification:
- Review your job title and actual duties
- Compare your salary to California threshold
- Analyze whether you meet all three exemption tests
- Consider if similar employees are classified differently
Report the Violation:
- Notify your employer in writing
- File a wage claim with Labor Commissioner
- Consider private legal action
- Explore class action if multiple employees affected
Protect Yourself:
- Don’t sign agreements waiving overtime rights
- Report retaliation immediately
- Preserve all evidence
- Consult an attorney before discussing with employer
How Law Offices of Todd M. Friedman, P.C. Can Help
At Law Offices of Todd M. Friedman, P.C., we understand the confusion created by the blocked federal overtime rule changes. However, California’s stronger protections mean many Los Angeles workers are still entitled to overtime pay regardless of federal developments.
Our Overtime and Misclassification Services:
Exemption Analysis: We thoroughly review your job duties, salary, and working conditions to determine if you’re properly classified as exempt under California law.
Damages Calculation: We accurately calculate all overtime owed, including:
- Unpaid overtime from misclassification
- Meal and rest break premiums
- Waiting time penalties
- Pay stub violation penalties
- Interest and other recoverable amounts
Strategic Representation: We determine the best approach for your case:
- Labor Commissioner wage claims
- Individual lawsuits
- Class or collective actions when violations affect multiple employees
Federal and State Claims: We pursue overtime violations under both federal Fair Labor Standards Act and California law, ensuring maximum recovery.
Retaliation Protection: We take immediate action if employers retaliate against employees who challenge misclassification.
No Recovery, No Fee: We handle overtime cases on a contingency basis—you pay no attorney fees unless we recover money for you.
Despite the blocked federal rule changes, California law still requires most employees earning less than $68,640 annually to receive overtime pay. If you’re working overtime hours without proper compensation, or if you believe you’ve been misclassified as exempt, don’t assume the blocked federal rule means you have no rights.
California’s laws remain strong, and Law Offices of Todd M. Friedman, P.C. has extensive experience helping Los Angeles workers recover unpaid overtime. Contact us today for a free consultation to discuss your situation.
Don’t let misclassification cost you thousands in unpaid overtime. Contact Law Offices of Todd M. Friedman, P.C. today to recover what you’re owed.
