OVERTIME AND SALARY MISCLASSIFICATION


Under California law, all employees are entitled to overtime pay unless the employer can prove that the employee qualifies for one of the narrow exemptions specified by the California Labor Code. Overtime pay is generally time and a half for hours worked over 8 in a day or 40 per week and double time for hours exceeding 12 per day or on the seventh straight day during a workweek.

Many of the cases we deal with involve employers who failed to pay overtime because they have misclassified the employee as "exempt" under one of the narrow exceptions to the overtime requirement. These misclassified employees are entitled to four years restitution of back pay under California law.

Here is a list of the exemptions that employers frequently misapply:

Computer Software Employee Exemption: California Labor Code §515.5 provides an exemption specifically for employees in the computer field. In order to qualify for this exemption, the employee must earn a relatively high salary. During some periods of time the required salary has been as high as $49.77 per hour or $99,540 per year. The minimum salary required to qualify for this exemption has changed several times and will change again in 2009, so you should consult an employment attorney to find out if this exemption applies to you.

Learned or Artistic Professional Exemption: The Wage Orders provide an exemption for employees whose primary job duty requires "knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from a general academic education and from an apprenticeship." In order to qualify for this exemption the employee must have completed an advanced degree beyond a BS or BA. DLSE Enforcement Manual §54.8.1.

Executive Exemption: The Wage Orders provide an exemption for employees who regularly supervise two or more subordinates and are responsible for "managing the enterprise in which he or she is employed."

Administrative Exemption: The Wage Orders provide an exemption for employees who meet multiple criteria including the following: 1) perform "non-manual work directly related to the management policies or general business operations of his/her employer;" 2) "customarily and regularly exercise discretion and independent judgment;" and 3) "performs under only general supervision work along specialized technical lines requiring special training experience or knowledge;"

For each of these exemptions, the employee must spend more than 50% of working time performing tasks that meet the requirements of the exemption and require independent judgment and discretion. That means that an employee who qualifies for an exemption is still entitled to overtime if he or she spends more than 50% of his or her time on non-exempt tasks.