Overtime Pay for Salary Employees

In the absence of an applicable exemption, the California Labor Code generally mandates that all employees be compensated at the rate of 1 ½ times the regular rate of compensation (hereafter, “overtime”) for all hours of work performed in excess of 8 hours in one workday or in excess of 40 hours in one workweek.

Additionally, the law requires that employees be compensated at double their regular rate of compensation (hereafter, “double-time”) for all hours worked in excess of 12 hours in any workday and for all hours worked in excess of 8 hours on the seventh consecutive day of work in a workweek.

Employers commonly classify their employees as either “exempt” or “non-exempt”.  Employers pay overtime to employees classified as “non-exempt”, and do not pay overtime to employees classified as “exempt”.  This practice by employers is often unlawful.  This is because the determination as to whether or not an employee is entitled to overtime pay has absolutely nothing to do with whether an employee has been classified as “exempt” or “non-exempt”, nor does the determination have anything to do with the title an employee may hold (such as “manager”, “supervisor”, “team leader”, or “vice president”, etc.).  Rather, this determination is made based primarily on the work duties an employee performs.  Employees must keep in mind that it is the law which determines whether he or she is entitled to overtime pay, not the employer.

The three most common types of exemptions are the executive exemption, the administrative exemption, and the professional exemption.  Below, please find an overview of these three exemptions.  Please keep in mind that only a qualified overtime pay attorney can accurately analyze whether or not an employee should be receiving overtime pay.  Whether you are paid on an hourly basis, a salaried basis, a commission basis, or any other type of pay arrangement, please contact the Law Office of Seth E. Tillmon for a free, no-obligation analysis as to whether you should be receiving overtime pay.

Executive Exemption

The executive exemption is available when an employee is employed in an executive capacity, meaning that the employee’s employment has all of the following characteristics:

1) – duties and responsibilities involving the management of the enterprise in which he/she is employed or of a customarily recognized department or subdivision thereof;

2) AND: – customarily and regularly directing the work of two or more other employees therein;

3) AND: – the authority to hire or fire other employees or to command that particular weight be given to his/her suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees;

4) AND: – the customary and regular exercise of discretion and independent judgment;

5) AND: – a monthly salary equivalent to no less than two times the state minimum wage for full-time employment;

6) AND: – primarily being engaged in duties which meet the test of the exemption (meaning that more than 50% of the employee’s worktime is spent on the above-listed duties).

Administrative Exemption

The administrative exemption is available when an employee is employed in an administrative capacity, meaning that the employee’s employment has all of the following characteristics:

1) – duties and responsibilities involving either:

– the performance of office or non-manual work directly related to management policies or general business operations of his/her employer or his/her employer’s customers; or

– the performance of functions in the administration of a school system or educational establishment or institution, or of a department or subdivision thereof, in work directly related to the academic instruction or training carried on therein;

2) AND: – the customary and regular exercise of discretion and independent judgment;

3) AND:

– the regular and direct assistance to a proprietor, or an employee employed in a bona fide executive or administrative capacity; or

– the regular performance, under only general supervision, of work along specialized or technical lines requiring special training, experience, or knowledge; or

– the execution, under only general supervision, of special assignments and tasks;

4) AND: – a monthly salary equivalent to no less than two times the state minimum wage for full-time employment;

5) AND: – primarily being engaged in duties which meet the test of the exemption (meaning that more than 50% of the employee’s worktime is spent on the above-listed duties).

Professional Exemption

The professional exemption is available when an employee is employed in a professional capacity, meaning that the employee’s employment has all of the following characteristics:

1) – Either:

– holding a license or certification by the State of California and being primarily engaged (more than 50% of worktime) in the practice of one of the following recognized professions: law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting; or

– being primarily engaged (more than 50% of worktime) in an occupation commonly recognized as a learned or artistic profession, meaning employed by means of work which :

– requires knowledge of an advanced type in a field of science or learning; or

– is original and creative in character in a recognized field or artistic endeavor, and the result of which depends primarily on the invention, imagination, or talent of the employee; and

– is predominantly intellectual and creative and is of such character that the output produced or the result accomplished cannot be standardized in relation to a given period of time;

2) AND: – customary and regular exercise of discretion and independent judgment in the performance of either of the applicable duties set forth above;

3) AND: – a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.

Comments are closed.