Exempt vs. Non-Exempt Employees in California

Image reads 'Exempt, well maybe'. Exempt or Non-Exempt California Employment attorneys

Determining whether you are a non-exempt or exempt employee in California can have major impacts.

Why Being Non-Exempt Matters

Whether or not you are an exempt employee can have a major impact on how much money you make, whether you get overtime pay and even whether your employer is required to provide you with meal and rest breaks.  Generally, employers must pay non-exempt employees overtime and provide meal and rest breaks for non-exempt employees.  On the other hand, exempt employees may not be entitled to overtime pay or meal and rest breaks.  In short, non-exempt employees have more rights and it is more likely that they will have a claim for violations of wage and hour laws such us unpaid overtime and violations of meal and rest period requirements.  For more information on overtime requirements for non-exempt employees, see this article, and for more information on meal and rest break requirements, click here.

You Might Be a Non-Exempt Employee, Even if Your Employer or Pay-stub Says That You Are Exempt

Your employer doesn’t decide whether or not you are exempt, the law does.  That means that even if your paystub says “CA Exempt,” or your employer tells you that you are exempt, you might still be entitled to overtime pay and meal and rest breaks.  So, how do you know whether or not you are exempt?  Figuring this out can be tricky and you may want to speak with a lawyer (we offer free consultations), but the guidelines below can help you determine whether you may be non-exempt.

If You Were Misclassified, Your Employer May Owe You Money

If your employer thinks you are exempt or has paid you as if you are exempt, but you are actually non-exempt, your employer may owe you money.  For example, if you haven’t been paid overtime, or you haven’t been given your rest breaks, you would be entitled to compensation.  To better understand how much your claim may be worth, click here for meal and rest break violations, here for unpaid overtime, or here to contact us.

You May be Non-Exempt If…

If any of the following apply to you, you may be non-exempt and you may be entitled to overtime pay as well as meal breaks and rest periods.

You are paid by the hour – If your employer pays you by the hour (i.e. the amount of money you receive each pay period depends on how many hours you worked), chances are that you are a non-exempt employee and that you are entitled to overtime pay and meal and rest breaks.  One rare exception to this rule is if you have a guaranteed minimum salary, but your employer pays you additional wages if you work long hours. Even in that case, if your salary ever dips below the guaranteed amount, you may be a non-exempt employee.

You make less than $3,446.67 a month or less than $41,600 a year – Exempt employees must make at least double the minimum wage.  As of 2016, the California minimum wage is set at $10 per hour.  Prior to this, it was set at $9 per hour (see this article on how the minimum wage in LA is increasing).  Therefore, if you are making less than $20 per hour, you are probably non-exempt and you are likely entitled to overtime pay and meal and rest breaks.  Even if you do make over $20 per hour, you may be non-exempt if you work less than 40 hours per week or less than 52 weeks per year.  If you aren’t making more than $41,600 a year, or you aren’t making $3,446.67 a month, you may be non-exempt.

You are not an executive, administrator, or professional – Sometimes it’s obvious to determine whether you fit one of these categories.  If you aren’t a doctor, lawyer, architect, or a member of a profession that requires a license from the state of California, you probably aren’t a professional.  On the other hand, it may be more difficult to determine whether or not you are an executive or administrator.  Executives generally help to manage their companies by supervising other employees and helping with hiring and firing decisions.  Administrators typically perform office work related to business operations and management policies.  These are both oversimplifications of the duties of executives and administrators.  Furthermore, even if you act as an executive or administrator in some situations, you may not be exempt.  Executive or administrator duties must be your primary responsibility.  An experienced attorney can help you to determine whether you are an executive or administrator.

Exceptions and Assistance

There are a number of exceptions to the rules discussed above.  For example, taxi cab drivers, teachers, and outside sales people are often exempt.  Due to the complicated regulations that govern your exemption status, speaking with an attorney may be the easiest way to determine whether you are non-exempt and whether you are entitled to overtime, meal breaks, and rest periods. If you would like to speak with an attorney for free about your exemption status or a possible claim against your employer, call us at (213) 631-4270, or input your contact information here and we will reach out to you for a free consultation.

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David Peer

About the author

David focuses his practice on civil litigation for small businesses and individuals. Prior to founding Peer & Hart, PC, David worked in WilmerHale's Los Angeles office litigating complex matters for multi-national corporations. David was a member of WilmerHale's patent litigation group and was on the trial team for large-scale patent cases in Federal Court. In 2015, David helped try a multi-week, billion dollar patent case. David also took part in government investigations and major discovery projects, giving him a deep understanding of efficiency and cost-reduction strategies in pre-trial litigation.

Since forming Peer | Hart, David has defended his clients from employment suits and actions in front of administrative agencies. David has negotiated favorable settlements and counseled his clients on cost effective litigation strategy and litigation prevention. David has an engineering degree and is registered to prosecute patents in front of the US Patent and Trademark Office.

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