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In opposition to the DLSE's position, a California Court of Appeal in Arechiga v. Dolores Press, 192 Cal.App.4th 567 (2011) held that Labor Code §515 did not prohibit a written employment agreement that provided a non-exempt employee a salary based on more than 40 hours of work in a week.
In response to the Court's ruling, the California legislature passed Assembly Bill 2103 which adds new subsection (d)(2) to California Labor Code §515:
"payment of a fixed salary to a nonexempt employee shall be deemed to provide compensation only for the employee's regular, nonovertime hours, notwithstanding any private agreement to the contrary."
Thus, effective January 1, 2013, a fixed salary paid to a nonexempt employee may only include compensation for the employee's regular, non-overtime hours. The legislation invalidates any employment agreement to the contrary.
Posted In: Employment Law News
Blog Categories:Business Law Bulletin
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Located in Los Angeles, California, the Law Office of Melissa C. Marsh handles business law and corporation law matters as a lawyer for clients throughout Los Angeles including Burbank, Sherman Oaks, Studio City, Valley Village, North Hollywood, Woodland Hills, Hollywood, West LA as well as Riverside County, San Fernando, Ventura County, and Santa Clarita. Attorney Melissa C. Marsh has considerable experience handling business matters both nationally and internationally. We routinely assist our clients with incorporation, forming a California corporation, forming a California llc, partnership, annual minutes, shareholder meetings, director meetings, getting a taxpayer ID number (EIN), buying a business, selling a business, commercial lease review, employee disputes, independent contractors, construction, and personal matters such as preparing a will, living trust, power of attorney, health care directive, and more.