California Labor Law Exemptions: How Do You Define Exempt Employees in California?
The most consistent area of abuse when it comes to overtime laws is in misclassifying exempt employees. In simple terms, “California labor law exemptions” are employers’ legal cause for not paying overtime. An important distinction, however, is that the employer must bear the burden of proving this exemption in order to prevent the employee seeking damages for the unpaid overtime. Determining which employees are exempt, and should not receive overtime pay is a complex issue that we will help you navigate. The current overtime laws provide that, if an employee is misclassified as exempt we can go back up to 4 years and collect their back overtime pay with interest and penalties.
What Are the Various Categories of Exempt Employees?
Under California wage and hour law, there are three major categories: the Professional Exemption, the Administrative Exemption, and the Executive Exemption. There are other specialized categories of exemption such as the California Caregivers Exemption, the Public Facility Caregivers Exemption, Outside Salesperson Exemption and Computer Workers Exemption.
Here I have these exemptions in basic terms so you can begin to decipher whether or not one of them fits your position,. You should call our office with any questions, so we can help you better understand the intricacies and what applies to you.
The California Professional Exemption:
The Professional Exemption or “Learned or Artistic” Exemption, applies to employees who maintain a license to practice a profession (i.e. doctors, lawyers). However, registered nurses, pharmacists, and most school teachers are non-exempt under these laws. This also includes those in most artistic professions, where their skills could not be simply taught to anyone with basic training, such as an architect, composer or artist.
California Administrative Exemption:
The Administrative Exemption is slightly more complex, and has to do with the duties performed by the employee, and whether or not the duties of the employee can pass an “administrative exempt test.” In simple terms, employees who spend over half their work time assisting the proprietor or other exempt individual in “servicing” a business in matters of significance falls under this exemption. An administrative exempt employee must work directly with another exempt employee or under only general supervision, and their work cannot involve making the products or performing services which the employer sells or markets.
California Executive Exemption:
Most of those who fall under the Executive exemption have titles, such as, CEO, CFO, VP and the like. If this is you, then most likely you are included here, but not always. The Executive Exemption applies to employees who spend over half their work time managing a businesses or departments of a business. The law on executive exemptions requires that the following occur to meet the tests for Executive Exemption status. NOTE: Your actual duties and not your title determine your exemption status. Calling you a manager does not get your company out of paying you overtime unless you fit the criteria below.
1: Manage the entire company or department or subdivision.
2: Direct the work of at least 2 subordinates in your department or division.
3: Have the power/authority to hire or fire – either directly or indirectly.
4: Exercise independent judgment and discretion
5: Spend more than 50% of your time doing the above tasks.
6: Be paid at least 2 times the minimum wage for a 40 hour weekly employee.
California Caregivers Exemption:
This section applies to employees who assist in a person’s private home as a caregiver and do not work for a residential care or a private business set up to provide residential care.
If the type of work an employee does is limited to tasks such as showering, toilet use, bathing, and preparing meals, then the California caregiver overtime exempt rules may apply. However, if the caregiver is performing tasks such as housecleaning or other tasks not related to client personal care over 20% of the time, it is likely the employee is entitled to overtime pay.
California Public Facility Caregivers Exemption:
These caregivers do not work in private households, and are generally entitled to overtime pay subject to a few exceptions.
California Outside Salesperson Exemption:
With regard to the outside sales exemption, the law in this area concentrates on the duties and place where these duties are performed. The outside salesperson exemption has been a hotly contested area in the courts. This confusion breeds abuse by employers. If a salesperson spends over half of their day engaging in sales activity away from the employer’s office, that person may fall under the outside sales exemption.
California Inside Salesperson Exemption:
The California inside sales exemption is different in many respects from the outside sales exemption. Under California law, the “commissioned sales exemption,” does not apply unless
(i) the employee is an “outside” salesperson, who spends more than half of their time engaging in sales activities outside the employer’s place of business; or
(ii) the salesperson makes more than 1 ½ times the minimum wage, and more than half of that employee’s compensation represents commissions.
More importantly, the “commissioned inside sales exemption” only applies to workers who are employed in the mercantile industry, or in professional, technical, clerical, mechanical or similar occupations.
The Computer Professionals Exemption:
United Employees Law Group has been a leader in the area of computer and IT overtime pay enforcement. Our firm, along with our co-counseling law firms, has successfully litigated against some of the largest computer companies in the world, and has recovered millions of dollars in overtime pay for hundreds of employees.
The computer software professional exemption is also sometimes known as the computer field exemption. This particular regulation is found under California Labor Code 515.5. Computer programmers rely on this law for guidance on overtime payment.
-Exempt computer professionals must work as many hours as their employers require, and are unfortunately not entitled to overtime pay, or timely meal and break periods due to their exemption status.
-The good news is that most computer professionals are actually non exempt, and entitled to overtime pay under California Labor Code. The computer professional’s minimum salary in California must be paid for the employers to have an opportunity to exempt the employee from overtime pay. See the Salary Chart parameters provided below. It is even more important to note that many Computer Programmers and IT Professionals are actually misclassified as exempt from overtime, when viewing compliance with California Labor Code 515.5, irrespective of the salary requirements.
These are state required minimums for payment
|Annual Salary Eq.|
These are simplified explanations to get you started. My office can help you sort out the intricacies and determine if you qualify for overtime pay.
Remember, there is a strict time limit for filing your claim, so you must take action quickly. If you find you may be owed back overtime or other pay, we can help. Call today for a completely free, no obligation review.