Employees are provided with a broad scope of protections under California’s employment and labor laws, including wage and hour laws, which typically apply only to workers classified as “non-exempt.” Those who are “exempt” do not have the same legal right to the wage and hour legal protections.
Although the benefits of being a non-exempt employee are clear, it can often be confusing for workers to know whether they are “non-exempt” or not. For instance, many employees who are paid a salary believe that they are automatically exempt. This is not true. In order to be “exempt,” an employee must meet certain requirements under California’s Wage Orders. If they do not meet these requirements, an employee is entitled to overtime, meal and rest breaks, and other protections under the law.
Exempt Employee Requirements
California and federal wage and hour laws typically do not apply to employees who are “exempt.” However, an employer cannot simply designate an employee as exempt by paying them a salary instead of an hourly wage. An employer also cannot require a worker to sign a contract agreeing to be an exempt employee. In order to classify an employee as “exempt,” there are strict legal criteria that must be met under California’s Wage Orders and the Labor Code.
Under the so-called white collar exemptions, executive, administrative, and professional employees are deemed exempt if they meet certain requirements in California. These include:
- Minimum Salary Threshold — To be classified as exempt, an employee must make a salary of at least twice the state’s minimum wage for full-time employment. In 2022, the minimum salary threshold is $58,240 for an employer with up to 25 employees, and $62,400 if the employer has 26 or more employees.
- White Collar Duties — At least 50% of the employee’s time must be spent performing exempt job duties, which involve the management of the enterprise or of a recognized department or subdivision (executive), the performance of office or non-manual work related to management policies or general business operations (administrative), or is licensed or certified by the State of California and is primarily engaged in law, medicine, dentistry, optometry, architecture, engineering, teaching or accounting (professional).
- Independent Judgment — An exempt employee uses discretion and independent judgment in carrying out his or her employment-related tasks.
To qualify for an executive exemption, in addition to satisfying the requirements above, an employee must also regularly direct the work of at least two other employees and have authority to make hiring and firing decisions.
Exempt administrative professionals must generally be engaged in tasks such as budgeting, auditing, accounting, marketing, human resources, and similar types of duties. Employees who perform administrative functions in a school system or educational establishment may also meet the requirements for the administrative exemption.
The professional exemption also applies to “learned or artistic professions” such as the sciences, creative arts, and those involving predominantly intellectual work.
Outside salespersons are generally exempt from the wage and hour laws. However, an employer cannot designate an employee as an outside salesperson if that employee simply works out of his or her own house. Outside sales typically does not include sales made by mail, telephone or the Internet unless such contact is used merely as an adjunct to personal calls. Rather, an outside salesperson An outside salesperson makes sales at the customer’s place of business or, if selling door-to-door, at the customer’s home.
Public employees (i.e. those who work for the state, or political subdivision such as a city, county or special district) are also generally exempt from California’s wage and hour laws, except for principally the minimum wage laws. Public employers must still satisfy the federal wage and hour requirements, including those pertaining to overtime.
Under California law, wage and hour protections are liberally construed in favor the employee, and any exemptions from those wage and hour protections are narrowly construed. It is an employer’s burden to establish that an exemption applies to a particular employee.
Protections For Non-Exempt Employees
Non-exempt employees who do not fit within any of the above-mentioned categories have a legal right to overtime pay, which must be paid at the rate of one and one-half a worker’s regular pay rate for any hours worked beyond eight in a day or 40 hours in a week. Employees must also be paid time and one-half for the first eight hours worked on the seventh consecutive workday in a week. An employee is entitled to double his or her regular rate of pay when working more than 12 hours in a day or at least eight hours on the seventh consecutive workday.
Unlike exempt employees, non-exempt employees must also be provided with one unpaid 30-minute meal break if they have worked for more than five hours. They are also entitled to a second unpaid 30-minute meal break if they have worked more than ten hours. However, the first break may be waived by mutual consent of the employer and employee if the shift is less than six hours long. The second meal break may be waived if the first break was taken and the total hours worked do not exceed 12 in a day.
California law also requires that employers authorize and permit employees to take a duty-free 10 minute rest period every 4 hours or major fraction thereof. This means that employees who work an 8 hour shift must be provided with 2 duty-free rest periods during their shift, or a minimum of 20 minutes of paid rest time.
Remedies For Misclassifying A Non-Exempt Employee
If an employee has been misclassified as exempt, an employee is entitled to recover past due overtime, statutory penalties for failing to provide duty-free meal and rest periods, civil penalties for violating the Labor Code, attorney’s fees, litigation costs, and interest. If numerous employees were affected by the employer’s misclassification, there may be grounds to file a class action lawsuit, or to file a case for civil penalties under the Private Attorneys General Act (PAGA).
Employers cannot terminate, retaliate or demote employees who assert their rights to wages that they are due, or who file a complaint for misclassification. An employee who has been terminated, demoted, or subjected to retaliatory action because he or she reported an employer’s wrongful misclassification may be able to recover damages in a subsequent legal action.
Contact Bartz Law Group, APC
If your employer has misclassified you as exempt, or if you have any questions about your legal rights, contact Bartz Law Group APC today at (800) 503-5716 to schedule a consultation.