California Exempt Employee Classifications: Are You Entitled to Overtime?

California wage and hour law, more commonly referred to as California overtime laws are designed to ensure that employees are not taken advantage of by their employer and that they are being paid properly for their job. In order to do this, California wage and hour law provides regulations that classify California workers as either non exempt or exempt from overtime. An employee that is paid hourly is a “non exempt employee” and is therefore entitled to overtime pay when applicable. An “exempt employee” is typically paid by salary and/or commission, and is considered exempt from overtime pay. Thus, an exempt employee’s compensation is not a function of the number of hours they work as it relates to overtime compensation.

Fortunately for California employees California overtime laws are quite specific when authorizing what jobs may be considered exempt from overtime pay. The most important factor in determining the exempt status of an employee are the duties that employee actually performs on a daily and weekly basis. Employers often fall victim to the myth that if they just provide a job title of “manager” or “supervisor” then they are in compliance with classifying this employee as exempt from overtime pay. That is not the case, and whether it is intentional or unintentional on the part of the employer, the employer will bear the burden of proving the exemption pursuant to California wage and hour law. Experienced California labor law attorneys are best suited to review the details of job tasks and duties and assist in making a legal determination of exempt or non exempt status.

California overtime laws outline several categories for exempt employee status. The major exemption categories are the California Professional Exemption, the California Administrative Exemption, and the California Executive Exemption. Many of the most common jobs that are exempt from overtime are classified under the California Professional Exemption. These are jobs that typically require a license to practice, such as doctors, attorneys, registered nurses, pharmacists and teachers. The California Administrative Exemption deals with employees who spend over half their work time assisting the proprietor or other exempt individual in "servicing" a business in matters of significance. The California Executive Exemption applies to employees that spend over half their work time either managing businesses or the departments of a business. There are six key areas where this compliance is tested to determine if an individual meets California Executive Exemption requirements. Lesser known categories of exempt classifications are the California Caregivers Exemption and the California Public Facility Caregivers Exemption.

The California Salesperson Exemption is a category which can be more easily covered if it is split into the two “sales types.” There is the California Outside Salesperson Exemption and the California Inside Sales Exemption. Both these exemption categories have been an area frequently abused by employers and often require the assistance of skilled California labor law attorneys to pursue potential claims. The California outside Salesperson Exemption concentrates on the duties and the place where those duties are performed, with a focus on over half of the day being engaged in sales activity away from the employer's office. In contrast, the California Inside Sales Exemption applies to salespersons making more than 1 ½ times the minimum wage, with more than half of their compensation being derived from commission pay. There are additional requirements about the industries in which these workers can be employed. California commission guidelines, whether for inside sales or outside sales, provide that employers must pay commissions earned but uncollected at the time of employment separation.

California wage and hour law affords many protections to California workers. Very often the most important regulations are those California overtime laws which prevent employer abuses related to misclassifying employees as exempt from overtime pay. This area of California wage and hour law can often be complex. If you are uncertain if your employer may be in violation of these overtime laws, contacting experienced California labor law attorneys is a wise course of action to get sound legal advice about a potential claim.