Exempt vs. Non-Exempt Employees: California Overtime Exemptions

The California Labor Code has a lost of the types of employees with exempt status under wage and hour law, or those to whom overtime pay and other wage/hour requirements do not apply.

In California, exempt workers in businesses with 25 or less employees must make a minimum of $1,120 per week ($58,240 annually) as of 2022. Additionally, exempt workers in firms with 26 or more staff members must make at least $1,200 per week. Only if your job duties are inside the legal parameters outlined by the California Labor Code are you considered an exempt employee.

Employees in Executive, Administrative, and Professional Roles

The most significant and significant group of exempt workers is

• executive
• governmental
• professional personnel

Sometimes referred to as the “white-collar exception,” this administrative exception to the overtime laws.

In order to fall under this category’s exemption from wage/hour legislation, an employee must:

• Has primary responsibilities in the executive, administrative, or professional domains. This typically means that they must devote at least 50% of their time to these tasks. For example running daily operations
• Exercising discretion and independent judgment on a regular and customary basis at work
• Earn a remuneration for full-time employment (40 hours per week) that is at least twice the state minimum wage.

The minimal salary needed for an employee to qualify for the white-collar exemption as of January 2022 is $58,240. Many people believe that anyone who receives a salary or works in an office qualifies as an exempt employee for this group. However, that is untrue in reality.

Exemption for Commission-Paying Employees

California law makes it clear that certain additional professions are exempt from overtime regulations in addition to the white-collar employees who are generally exempt from wage and hour laws outlined above. (The majority of employees eligible under these particular exemptions would likely also be exempt under the general exemption.)

The final exception to the overtime laws is for those who:

• Rake in more than 1.5 times the minimum wage
• Commissions to make up the majority of their pay

Employees who receive commissions must therefore make more than $22.50 per hour  or $21.00 per hour to qualify for exemption .

Which Wage and Hour Laws Do Exempt Employees not Fall Under?

The overtime regulations in California do not apply to exempt employees.

For example, if you work: It is not mandatory for your employer to pay you time and a half if you are an exempt employee.

• a day of labor has more than eight hours
• a workweek that lasts longer than forty hours.
• “work off the clock” otherwise.

Additionally, unlike non-exempt workers, it is not mandatory for exempt employees in California to get regular food and rest breaks from their employers.

What Can I Do if I’m Misclassified by My Employer?

When an employee is getting a salary rather than an hourly rate or has a “desk job,” the employer frequently assumes that the worker is ignorant of the law and asserts that the person is exempt.

A worker may even have a requirement to sign an employment contract “agreeing” to be exempt from overtime requirements before being asked to complete a significant quantity of “work off the clock” in specific circumstances.

Nevertheless, none of these elements will qualify a non-exempt employee for exemption under California wage and hour law.

One way to resolve the issue is by visiting HR or speaking with your manager about your status.  A wage and hour class action lawsuit may be suitable if many employees are impacted. Employees who were misclassified as non-exempt may also be entitled to reimbursement for unused lunch and rest periods.

Glendale Lawyer

If you or a loved one has concern about the differences between exempt and non-exempt employees in California or wants to discuss a case in confidence, contact one of our knowledgeable California employment attorneys. Please feel free to give our office a call at 310.943.1171.