Source: https://www.employees-lawyer.com/exempt-californias-wage-hour-laws/
Timestamp: 2019-04-18 16:32:31+00:00

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How to tell if you’re “exempt” from California’s wage and hour laws.
In employment law, employees are classified as either “exempt” or “non-exempt” for the purposes of California’s wage and hour rules. These classifications refer to whether certain labor standards apply to the employee—like the right to: a minimum wage, overtime pay, meal periods, or rest breaks. Employees that are classified as “exempt” generally do not have a right to these benefits; while non-exempt employees do.
The benefits and drawbacks of being a non-exempt employee are clear. Determining whether someone is properly classified, however, is much less clear. Unfortunately, many California employees are wrongly classified as “exempt,” even though they are legally entitled to employment benefits like overtime wages. To be exempt from these benefits, California employers must meet a strict set of legal requirements before they can avoid paying overtime. Simply put, you might be entitled to overtime pay even if your employer has classified you as “exempt” and paid a fixed salary.
1 Classification and employee rights.
2 Why do employers misclassify employees as “exempt”?
3 What benefits should non-exempt employees receive?
4 What benefits should exempt employees receive?
5 How do I know if I am properly classified as an exempt/salaried or non-salaried employee?
6 How much past overtime can I recover and how do I prove I am owed overtime?
7 Calculating unpaid overtime if you have been misclassified as exempt.
8 Can my employer take action against me if I exercise my employment rights and ask for my unpaid wages?
9 Are certain occupations automatically exempt from overtime?
To be properly classified as “exempt” under California and federal law, an employer must meet stringent legal requirements. It does not matter if your employer is simply paying you a fixed salary every month. It does not matter that your employer says you are exempt. What matters is the nature of your work, your daily job duties, and the time you spend each workday on those duties.
From your employer’s perspective, there are enormous savings in classifying an employee as “exempt.” For example, an exempt employee is not entitled to overtime pay and they don’t have a right to rest or meal breaks. Unfortunately, some employers try to take advantage of this enormous cost savings and improperly classify their employees. This improper classification, if caught, can result in significant penalties for employers. For example, employees who are improperly classified as exempt or salaried workers are entitled to recover: all their unpaid overtime, penalties, fines, attorney’s fees, and litigation costs.
Why do employers misclassify employees as “exempt”?
It is very tempting for some employers to save on their payroll expenses by improperly classifying their employees as “exempt.” By doing so, they can squeeze more labor and work hours from their employees without additional cost. Even a small company that employs five to 15 employees at average wages can save $10,000 or more every month by paying their workers under the exempt status without overtime.
Unfortunately, many employers improperly classify their employees in the hopes they don’t get caught. Employees have often been misled or have been wrongly informed of their employment and labor law rights in the workplace. Please continue reading if you want to know your employment and labor law rights.
What benefits should non-exempt employees receive?
Normally, non-exempt employees are entitled to overtime payments of at least time and a half (1 ½ times your hourly rate) for any work performed beyond eight (8) hours per day or 40 hours per week. ((Labor Code, § 510, subd. (a).)) If you are non-exempt but are paid a salary, your “hourly rate” for these purposes is one-fortieth (1/40th) the rate of your weekly salary.
If you work more than 12 hours per day, you are entitled to double time (pay at 2 times your hourly rate) for anything worked beyond those 12 hours. If you work seven days in a row, you are entitled to time and a half for your first eight hours and double time for any work performed beyond that.
More than 8 hours in a workday: 1.5 times your hourly rate.
More than 12 hours in a workday: 2 times your hourly rate.
8 hours or less on your 7th consecutive day of work: 1.5 times your hourly rate.
More than 8 hours on your 7th consecutive day of work: 2 times your hourly rate.
Non-exempt employees also have a right to meal and rest periods.
Meal Periods are unpaid and uninterrupted 30-minute breaks. Generally, employees that work more than five hours in a workday have a right to one meal period, and employees that work more than 10 hours in a workday have a right to two meal periods.
Rest periods are paid 10-minute breaks that employees have a right to take at certain times during their workday. Non-exempt employees are entitled to one rest break for every four hours of work (or substantial portion of four hours).
If an employer fails to give an employee a meal or rest break, employees are generally entitled to additional compensation as a penalty.
What benefits should exempt employees receive?
Exempt workers, on the other hand, are not entitled to any additional pay. It does not matter whether they work more than eight (8) hours per workday or 40 hours per work week. They are not legally entitled to overtime and are not paid anything extra. They are also not entitled to meal or rest periods. The usual exempt employees are: executive, administrative, or professional employees.
How do I know if I am properly classified as an exempt/salaried or non-salaried employee?
The legal minimum compensation for every exempt California employee cannot be less than $2,773.33 per month or $33,280 annually. ((Labor Code, § 1182.12.)) This number is calculated based on the minimum wage, which is increasing beginning on July 1, 2014, to $9.00 per hour. This means that the legal minimum compensation will for every exempt California employee will increase to $3,120 per month or $37,740 annually beginning July 1, 2014.
In addition, any exempt employee must spend more than 50% of their work time performing exempt duties. Therefore, any employee who spends more than 50% of their time performing non-exempt tasks is eligible for overtime pay and other benefits to which non-exempt employees are entitled.
A person licensed or certified by the State of California who spends more than 50% of their time engaged in the practice of one of the following recognized professions: ((Labor Code, § 515, subd. (e).)) law, medicine (but not registered nurses, ((Labor Code, § 515, subd. (f)(1).)) medical interns or residents) ((Labor Code, § 515.6, subd. (b).)), dentistry, optometry, architecture, engineering, teachers (but not teaching assistants, tutors day care providers or other similar employees) ((Labor Code, § 515.8.)) or accounting.
They customarily and regularly exercise discretion and independent judgment in performing duties in their licensed or certified profession.
Meets the requirements of the duties that permit an administrative exemption for the industry they are employed in as stated in the IWC orders located at: http://www.dir.ca.gov/iwc/wageorderindustries.htm.
To properly determine whether you properly classified as an exempt or non-exempt employee, it’s important to discuss the specific facts of your situation with a lawyer. Your lawyer will need to understand: your daily job duties, the time spent you spend on those job duties, and the skills and training your job requires.
How much past overtime can I recover and how do I prove I am owed overtime?
You can recover overtime that you have missed going back for as much as three (3) years. ((Labor Code, § 1194; Code of Civ. Proc., § 338, subd. (a).)) Understandably, some employees are worried about proving their overtime, rest period, and meal break claims without written records. California law requires employers to retain employee records for at least three (3) years. ((Labor Code, § 1174, subd. (d).)) If your employer did not keep accurate records, you only need to present your best estimates of your work schedule.
Calculating unpaid overtime if you have been misclassified as exempt.
Step One: Determine your hourly rate. Determine Robert’s hourly rate by dividing his annual compensation by 2080 non-overtime paid hours per year.
$33,600 annual salary ÷ 2,080 hours = Robert’s hourly rate = $16.15 per hour.
$33,600 annual salary ÷ 12 months = Robert’s Monthly Salary = $2,800.
Step Two: Determine your overtime rate and monthly overtime average. Multiply the hourly rate calculated above by 1.5. ((2 times the hourly rate is applied for all work performed 12 hours a day, or more than eight hours on the seventh consecutive day worked. (Labor Code, § 510, subd. (a).) )) This gives you your hourly overtime rate. Multiply your hourly overtime rate by the number of overtime hours per month. Here, Robert works 40 overtime hours per month because he works 10 hours of overtime each week.
$16.15 hourly rate x 1.5 overtime wage rate x 40 overtime hours per month = $969 of unpaid overtime each month.
Step Three: Determine the annual backpay you are owed for overtime. Multiply unpaid overtime each month by 12 months.
$969 monthly unpaid overtime x 12 months = $11,628 of unpaid overtime each year.
Robert can possibly make a legal claim of $11,628 for each year he was not paid overtime. Robert could make a total claim of $34,884 if he sues for his last three years of unpaid overtime wages. In addition to his unpaid wages, Robert could also be entitled to additional compensation from interest, other waiting time penalties, and his attorney’s fees and costs from filing his lawsuit.
Can my employer take action against me if I exercise my employment rights and ask for my unpaid wages?
Are certain occupations automatically exempt from overtime?
Unfortunately, there is no clear bright line rule that separates an exempt from a non-exempt employee. If you are having trouble determining whether you have been improperly characterized as an exempt employee and do not know how to calculate how much money is owed to you, we can help. If you are an employer, we can help you avoid employment law violations and craft a compensation system to avoid lawsuits and minimize future legal costs. Please call Optimum Employment Lawyers at (949) 954-8181 for a confidential and complimentary consultation to determine your legal rights and options.

References: § 510
 § 1182
 § 515
 § 515
 § 515
 § 515
 § 1194
 § 338
 § 1174
 § 510