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Difference Between Exempt and Nonexempt Employees in California

Posted by Eric Kingsley | Jun 25, 2023 | 0 Comments

California labor laws classify different types of employees based on their job duties and the type of work they do. Exempt and nonexempt employees in California are distinguished based on their job duties as well as their pay structure.

These differences typically determine whether or not an employee is subject to state and federal laws that dictate rules with regard to overtime pay, meal and rest breaks and paid time off. A large number of employment lawsuits stem from disputes that arise from these classifications.

Many employers in California try to game the system by taking advantage of these categories and misclassifying their employees to avoid paying overtime or providing them with other benefits. This is why it is crucial that California employees understand the key differences between what is means to be exempt and nonexempt.

Exempt or Nonexempt: How Can You Tell?

Here are two of the main factors that draw the distinction between exempt and nonexempt classifications:

Your pay: Under California law, for a job to be classified as exempt, an employee must earn no less than twice the state's minimum wage. As of Jan. 1, 2023, employees in California must earn an annual salary of no less than $64,480 to meet this threshold. This rule is a guideline for employers and California labor commissioners when they set out to determine whether a position could be considered exempt. If you make less than $64,480, it may be an indication that you have been misclassified.

Your job title: You can also tell if you are an exempt or nonexempt employee based on your job title. In general, job titles that reflect management or supervisory status are more likely to be considered exempt. Common positions that fall under this classification include executive, administrative and managerial titles.

Common executive titles include CEO, CFO, vice president, director and regional manager. Administrative titles include executive secretary, senior assistant, administrative director, etc. Some professional titles may also fall under this category.

Examples include doctor, lawyer, consultant, IT manager, senior accountant, etc. There are also other jobs involving independent workers that are automatically exempt such as freelance workers, independent contractors, outside sales professionals and so on.

What is the Difference Between Exempt and Nonexempt?

Workers who are classified as "exempt" are essentially exempted from the legal protections afforded by California's wage and hour laws. Employees who are classified as nonexempt or hourly are entitled to receive those protections. This means that typically exempt employees are not entitled to overtime pay or rest or meal breaks.

Overtime Laws

California's overtime law requires employers to pay non-exempt workers overtime for each hour worked over 8 hours in a single workday, 40 hours in a single workweek or six consecutive days in a workweek. The overtime is paid at the rate of one and a half times the employee's regular hourly rate of pay.

Employees are entitled to receive double-time pay if they work more than 12 hours in a single workday or 8 hours on the seventh consecutive day in the workweek. Exempt workers are not entitled to overtime pay.

Meal and Rest Breaks

California law also gives non-exempt or hourly workers the right to take meal breaks and rest breaks. Employees are entitled to one unpaid 30-minute meal break if they work more than five hours in a workday.

If you work more than 10 hours in one workday, you are entitled to a second unpaid 30-minute break. Employees are entitled to one paid 10-minute rest break for every four hours worked. Exempt workers are not entitled to meal or rest breaks.

Minimum Wage

Hourly workers are entitled to receive California's minimum wage. While it is true that exempt workers are not covered under minimum wage protections, their exempt status hinges on their salary being well above the minimum wage.

Their monthly salary must be at least twice the minimum wage. If the exempt employee's salary is below that required threshold, they cannot be classified as exempt.

What to Do If Your Position Has Been Misclassified?

Employers in California are required to classify their employees accurately. If the company you work for has misclassified you, it is important to understand that you have legal rights.

You may be able to seek compensation for your unpaid wages, reimbursements, overtime and other benefits. The economic losses you may have sustained and the value of your claim will depend on your job duties and work arrangement.

How An Experienced Employment Lawyer Can Help

One of the most important steps you can take if your employer has misclassified you is to contact an experienced California employment lawyer. This is a serious and complex issue that requires knowledge and expertise.

Your employment lawyer can help ensure that your claim is filed in time and that you submit the necessary paperwork. If you suspect you have been misclassified at work, call Kingsley & Kingsley Lawyers to obtain more information about protecting your legal rights.

About the Author

Eric Kingsley

Eric B. Kingsley is a 2023 "Best In Law" Award winner and has litigated over 150 class actions. He is also an AV peer rated attorney and a prolific speaker at various seminars on employment law.


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