What is a California Exempt Employee?
Under California law, three requirements determine whether an employee is exempt or non-exempt:
- Minimum salary,
- White-collar duties, and
- Independent judgment.
1. Minimum Salary
To satisfy the minimum salary requirement, employers must pay employees on a salary basis rather than an hourly basis. A full-time employee must also receive a salary that is at least twice the California minimum wage.
A full-time employee is one that works 40 hours per week.
2. White-Collar Duties
Work functions must be examined to determine whether they fall into the category of white-collar duties. An employee must perform these primary duties more than half of the time to satisfy the test.
White-collar duties are separated into three categories: administrative, professional, and executive.
An individual is considered an administrative employee if their job function relates to management or business operations.
Examples of duties relating to management or business operations include accounting, human resources, and marketing.
There are typically three types of professional employees that can be considered exempt employees: licensed, learned, and creative professionals.
Licensed professionals are certified or licensed by the state of California, including lawyers, doctors, engineers, and teachers.
Learned professionals are those with extensive knowledge in a field of science or a subject defined by specialized study.
Creative professionals work in fields defined by creativity or invention.
These kinds of employees typically hold leadership roles. Their primary duty entails management, having at least one or two employees working under them.
Executive employees also have the power to hire and fire or make recommendations about hiring and firing within the business.
3. Independent Judgment
To qualify as a California exempt employee, the employee must be able to exercise independent judgment in their role.
Judgment is independent when the employee can make decisions on their own without supervision, even if there is a higher-up that may veto this decision.
Certain jobs have their own specific rules for exemption.
The most common jobs with job-specific exemptions include:
- Commissioned employees;
- Outside salespeople;
- Computer professionals;
- Physicians and surgeons;
- Private school teachers;
- Truck drivers; and
- Union employees.
These jobs have specialized tests to determine whether the employee is exempt vs. non-exempt. Employees may also be partially exempt.
What Is a California Non-Exempt Employee?
Non-exempt employees in California are given certain rights, including minimum wage, overtime, and breaks.
Non-exempt employees are required to make at least minimum wage. According to the Department of Industrial Relations for the State of California, the minimum wage is $12 an hour for employers with 25 employees or less and $13 an hour for employers with 26 employees or more.
California law requires employers to pay non-exempt employees one-and-a-half times their usual hourly rate when working overtime, including for:
- Over 8 hours in a workday;
- Over 40 hours in a workweek; and
- The first 8 hours worked on a seventh consecutive workday in one workweek.
California law requires employers to pay non-exempt employees twice their usual hourly rate for:
- Over 12 hours in a workday; and
- Over 8 hours worked on the seventh consecutive workday in one workweek.
If you are working overtime hours as a non-exempt employee, make sure you are receiving the compensation you deserve.
Most employees, including exempt employees, are entitled to an unpaid, 30-minute lunch break if they work more than 5 hours a day. If an employee works 10 or more hours in a day, they are allowed to have another meal break.
During lunch breaks, employees are free to leave the premises and must be relieved of all work responsibilities.
Non-exempt employees are also entitled to a paid 10-minute break for every 4 hours worked.
Often employers mistakenly classify non-exempt employees as exempt. If this occurs, an employer may owe the employee unpaid wages. These may include damages for unpaid overtime or breaks never provided to the employee.
There are many reasons why an employer may choose to misclassify an employee as exempt.
Reasons might include:
- Not being required to pay overtime;
- Not having to provide lunch or rest breaks; or
- Financial reasons.
It may not be immediately evident to an employee that they should be classified as non-exempt rather than exempt.
It is essential to look for signs, like being paid by the hour, having a modest hourly pay rate, or having labor-intensive job duties.
When You Can Sue Your Employer
If your employer has wrongfully classified you as exempt, you may be able to sue for unpaid wages.
A wrongfully classified employee might be able to recover damages for:
- Minimum wage violations,
- Unpaid overtime,
- Missed lunch and rest breaks, and
- Legal fees and court costs.
How an Employment Rights Attorney Can Help You
Navigating a California employment lawsuit can be tricky. If you feel you have been wronged as an employee, you may want to have an employment rights attorney review your case.
Workplace Rights Law Group knows how to “play the game.” Having represented many employers throughout our nearly 100 years of combined experience gives us a unique perspective. We provide individualized attention to each client, allowing them the opportunity to achieve better results.