What California Employees Are Exempt from FLSA Overtime Laws?
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Which California employees are exempt from the overtime 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, California’s exempt employees 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):
- 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
- 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
- Principal duties involve work that requires invention, imagination, originality, or talent in a recognized field of artistic or creative undertaking
Outside Sales: Physicians & Surgeons:
- 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.
- 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:
Highly Compensated Jobs (apply only to public sector employees):
- 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. Effective January 1, 2018, to qualify for the California computer professional employee exemption, employees must have a salary of at least $90,790.07 per year or an hourly wage of at least $43.58. California computer professionals must also still satisfy the duties test pursuant to Labor Code Section 515.5.
- All employees guaranteed a total annual compensation of $100,000, not including medical or life insurance, pension, and retirement plan contributions or other fringe benefits
- Excluded from this exemption are “blue collar” workers, police officers, fire fighters, paramedics, EMTs, and other first responders, no matter how much they are paid.
Further complicating the classification of exempt employees in California is the fact that the legislators often change the law resulting in many unexpected twists in it. 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. Overtime lawyers specializing in overtime law
are not a luxury in California, but a necessity.
If you are employed in the State of California and feel that your employer has misclassified you as a California exempt employee, it is in your best interest to contact an experienced overtime attorney who will help you determine if you might have a valid case.