California exempt employees are workers who are not eligible for overtime pay because of their classification as exempt under the Federal Fair Labor Standards Act (FLSA) and related California labor laws.
California’s labor laws are more stringent than the Federal overtime laws and are arguably among the most stringent in the nation. In order to protect employees from being taken advantage of, California exempt employees must meet rigorous requirements. In summary, exempt employees under California law include those who qualify under the following exemptions (unless otherwise noted, these employees must also meet the minimum salary test in which they receive at least twice the state’s minimum wages as salary):
Executive:
- Primary responsibilities are management of the business, department, or subdivision
- Regular supervision and directing the work of two or more subordinates; the authority to hire, fire, and determine wage levels or recommend such for other employees of other employees
- More than 50% of the workday spent in activities related to management duties
- Discretionary power exercised or at least 20% equity ownership in a business and active involvement in the management of the company
Learned Professional:
- Performance of duties requiring advanced knowledge or learning acquired by a prolonged course of specialized educational instruction
- Generally, only licensed or certified occupations are exempt including law, medicine, dentistry, optometry, architecture, engineering, teaching, and accounting, in which the employee has freedom of choice as to how to accomplish non-standardized work more than 50% of the time
Creative Professional:
- Principal duties involve work that requires invention, imagination, originality, or talent in a recognized field of artistic or creative undertaking
Administrative:
- Areas of responsibility in doing office (non-manual) work directly related to the general business operations or management of the employer or the employer’s customers which entails exercising discretion and independent judgment more than 50% of the time
Outside Sales:
- Any person, 18 years of age or older, who customarily and regularly works more than half the working time away from the employer’s place of business selling tangible or intangible items or obtaining orders or contracts for products, services, or use of facilities
Physicians & Surgeons:
- Employees 18 years of age or more whose primary duties include making sales or obtaining orders, contracts for services, or for the use of facilities
- Those who usually work away from the employer’s place of business selling tangible or intangible items more than 50% of the time.
- Employees who receive commissions from sales for compensation
- Licensed physicians and surgeons who perform duties for which a medical license is required, so long as they are paid at least the minimum wage set annually by the state
In California exempt employees also include the following categories:
Computer-related Occupation:
- This exemption is very similar to the Learned Professional exemption but was specifically enacted to protect computer programmers and systems analysts, applications programmers and analysts, software engineers and specialists, and systems specialists
- They must be paid at least a minimum amount dictated by law in order to be exempt from overtime pay requirements
Highly Compensated Jobs:
- Unlike federal law, California does not have a highly compensated overtime exemption
Exempt classification can be complicated due to variations in the law. For example, Medical profession exemptions include physicians but not nurses, and pharmacists are no longer automatically considered to be California exempt employees. Attorneys are exempt but paralegals are not, and while certified public accountants are exempt, uncertified accountants are not.
If you are employed in the State of California and feel that your employer has misclassified you as a California exempt employee, you can submit your information using our online intake form for a free and confidential review.
