What Is an Exempt Employee in California?

An exempt employee in California might be misclassified unless certain criteria are met.

Many people believe that anyone with the word “manager” in the job title is exempt from protections like overtime wage requirements, but the definition is much more complicated than that.

What Does It Mean To Be An Exempt Employee?

An exempt employee does not receive overtime compensation or mandated rest or lunch breaks. The exempt employee is paid a salary, which means the exempt employee might work 42 hours one week, but have a doctor’s appointment the next week causing him or her to miss two hours of work. The employee will be paid the same because he or she is salaried, not hourly.

Non-exempt employees are subject to state and federal regulations regarding overtime pay, rest breaks and meal periods.

According to California employment law, an exempt employee must be paid at least twice the minimum hourly wage, calculated on a workweek consisting of 40 hours. The state also designated certain professions as exempt, including executive, administrative, and professional employees.

Each year on January 1, from 2017 to 2023, the California minimum wage is scheduled for an increase, and as a result, the minimum salary requirement for exempt employees will increase, too.

Who Is The Typical Exempt Employee in California?

Many people in executive, administrative and professional positions are considered exempt employees. In some cases, IT professionals, healthcare professionals and outside salespeople are exempt employees, too.

How Can I Tell If I Am Misclassified as Exempt?

An exempt employee’s pay is not impacted by hours worked. If your employer subtracts wages from your paycheck when you miss a couple of hours of work to go to a doctor’s appointment, then your employer may have you improperly classified as exempt employee.

If your job duties have changed, you may qualify as an exempt employee if you have the autonomous ability to hire and fire other employees. If you transfer to another area of the company where you spend approximately 70 percent of your time completing administrative duties, you may no longer qualify as an exempt employee.

When your classification changes to non-exempt, you are entitled to overtime pay for hours worked beyond 40 in a work week, rest breaks and meal breaks.

If I Supervise the Work of Two or More Employees, Do I Qualify as an Exempt Employee in California?

California law does say that the Executive Exemption applies to an employee who directs the work of two or more employees; has the authority to hire or fire employees or to at least make such recommendations; uses their own discretion and independent judgment; and receives a monthly salary no less than twice California’s current minimum wage for full-time employment.

Why Would I Question My Employer’s Decision to Make Me An Exempt Employee?

Certain employers have misclassified employees as exempt on purpose in an attempt to save money. Such an intentional misclassification is a violation of California’s labor laws and of the federal Fair Labor Standards Act (FLSA).

Employers like exempt employees because they don’t have to track their hours, pay them overtime pay, or ensure they receive meal or rest breaks.

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