Potential Exemptions from Overtime
Certain "white-collar" salaried employees are exempt from being paid overtime. Subject to certain exceptions set forth in the regulations, in order to be considered "salaried," employees must receive their full salary for any workweek in which they perform any work without regard to the number of days or hours actually worked. They also may not be required to make up partial day absences by working extra hours or having their vacation accounts docked. The special requirements which apply to each category of employees are summarized below.
The executive exemption is commonly used to classify managers as exempt from overtime. It is applicable to employees who have management as their primary duty (more than 50% of their duties), who direct the work of two or more full-time employees, who have the authority to hire and fire or make recommendations regarding decisions affecting the employment status of others, who regularly exercise a high degree of independent judgment in their work, and who receive a salary of not less than two times the state minimum wage for full-time employment.
The administrative exemption applies to employees who perform office or non-manual work which is directly related to the management policies or general business operations of their employer or their employer's customers. They must regularly exercise discretion and judgment in their work and perform under only general supervision. These employees work along specialized or technical lines requiring special training, experience, or knowledge, or execute special assignments and tasks under only general supervision. Employees primarily engaged in producing the employer's product or service are not properly classified as administrative employees, and must receive a salary of no less than two times the state minimum wage for full-time employment.
The professional exemption pertains to employees who perform work requiring advanced knowledge and education, a license or certification by the State of California in law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting, or are primarily engaged in work requiring specialized knowledge gained through an advanced course of study, generally beyond a bachelor's degree, or who work in an artistic field which is original and creative, and who regularly exercise discretion and judgment. These employees must also receive a salary of no less than two times the state minimum wage for full-time employment.
Outside Sales Exemption
Employees who engage in making sales or obtaining orders away from their employer's place of business and who devote more than 50% of their time to such duties are exempt from overtime wages. Commissioned inside sales persons who earn at least one and one half times the minimum wage and more than half of their income from bona fide commissions are similarly exempt, although they are entitled to rest and meal periods or premium compensation in lieu thereof.
A separate exemption also exists for certain computer and high-tech professionals. If you have been told that you are exempt from overtime requirements but do not feel that you fit into one of the classes of exemptions listed above, contact the Carter Law Firm today for a professional assessment.