The most basic rule that workers should understand is that pursuant to both the Federal Fair Labor Standards Act (FLSA) and California Labor Law (subject to some exemptions), all work performed in excess of 40 hours in one workweek is considered overtime and must be paid at one and a half times (1.5X) the employee’s regular rate of pay. So not all employees will qualify as exempt. 3.↥, See, e.g., Cal. 13, § 1200, et seq.↥, See Cal. For the first pay stub violation, the employee is entitled to a $50 penalty.⁠84 The employee is then entitled to a penalty of $100 per pay period for every violation after that, up to $4,000.⁠85. 3.↥, Cal. In a commission-based arrangement, the size of the employee’s compensation depends on the amount or value of the thing that was sold.⁠41, A discretionary payment that an employer can choose to pay or withhold, such as a performance bonus, is not a commission even if it is computed as a percentage of sales or profits.⁠42. It’s usually a good idea to get the opinion of a lawyer before deciding how to proceed. In addition, double time is paid for hours over 12 per day and hours over 8 on the seventh consecutive day in a week. The Los Angeles employment lawyers of Kokozian Law Firm fight for the rights of employees who have been wrongfully terminated, discriminated or sexually harassed at work. Federal law extends that time to three years if the misclassification was willful.⁠97, 29 U.S.C. The more common exemptions are discussed below. New California Law Restores Daily Overtime. There are three types of professional employees that can qualify for exemptions: The professional employee exemption is fact-specific and depends on the nature of the work that the employee primarily undertakes. In general, an employee is only exempt if they are paid on a salary basis (rather than an hourly wage).⁠11 The salary must be at least at least twice the state minimum wage for full-time employment.⁠12, A salary, for these purposes, is an unvarying minimum amount of pay.⁠13 The employee’s pay must be predetermined, and cannot change based on the number of hours worked or the quality of the work performed.⁠14, Courts have suggested that employers can deduct from an employee’s pay for full-day absences and still consider the employee to be paid on a salary basis.⁠15 But the employee would no longer be considered “salaried” if the employer deducted for partial-day absences.⁠16, If the employee’s pay is based on the number of hours worked with no minimum guarantee, the employee will be treated as being an hourly employee (an thus nonexempt).⁠17, As mentioned above, California law requires the employee to be paid a monthly salary of at least twice the state minimum wage for full-time employment to qualify as exempt. Their primary duty is the management of a business or one of its departments; They regularly direct the work of two or more other employees; and, They have the authority to hire and fire employees, or to make recommendations about hiring, firing, promotions, and wages that are given particular weight.⁠. If an employee has been deprived of their full pay due to being misclassified as exempt, they are sometimes entitled to receive this. Code of Regs., tit. 8, §§ 11010⁠–⁠11170, subds. Exempt from overtime provisions Order 14 Any employee who is engaged in work that is primarily intellectual, managerial, or creative , and which requires exercise of discretion and independent judgment, and for which the remuneration is not less than two times the monthly State minimum wage for … 8, §§ 11010⁠–⁠11170 [wage orders of the California Industrial Welfare Commission].↥, Cal. Code of Regs., tit. Code of Regs., tit. Or the employee may seek administrative relief by filing a wage claim with the commissioner pursuant to a special statutory scheme codified in [Labor Code] sections 98 to 98.8.”].↥, Code Civ. There are also exemption tests that must be met. Code of Regs., tit. Executive, Administrative and Professional employees. Nonexempt employees in California have a right to be paid overtime wages when they work more than eight hours in a workday, 40 hours in a work week, or seven consecutive days.⁠74 When employers misclassify their employees as exempt, they often fail to pay the employee overtime wages. As of January 1, 2008, minimum wage in California is $8.00 per hour. Resolve their dispute informally with their employer. The new, stricter requirements for overtime exemptions The Department of Labor approved a new rule for (a); Cal. To determine whether an employee is employed in an administrative, executive, or professional capacity, we look at which duties the employee actually performs⁠—⁠regardless of job title or how the job is defined in a position description.⁠24, Importantly, the white collar duties test focuses on the employee’s primary duties. Co. (2003) 105 Cal.App.4th 171, 175.↥, Cal. There are, however, several types of employees that do not have a right to earn overtime pay at an increased rate. 8, § 11040 [providing that, for each exempted category, the employee must earn “a monthly salary equivalent to no less than two (2) times the state minimum wage for full-time employment”].↥, Labor Code, § 515, subd. In California, everyone is entitled to overtime pay, unless they meet one or more of the narrowly defined exemptions . Code of Regs., tit. 8, §§ 11010⁠–⁠11150, subds. Code Regs., tit. § 541.202(a) [“In general, the exercise of discretion and independent judgment involves the comparison and the evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered.”].↥, 29 C.F.R. California courts narrowly construe the exemptions explained above. (c); Cal. If you require legal advice, you should contact a lawyer to advise you personally about your situation. The employee’s earnings are more than one-and-a-half times the minimum wage. Employees in the computer software field are sometimes exempt for the purposes of overtime compensation.⁠46 To qualify for this exemption, the following requirements must be met: Many teachers are exempt under the professional exemption described above. If you any attorneys or law firms mentioned on this website, you are initiating a professional relationship with us within the meaning of rule 7.3, subdivision (a)(2), of the California Rules of Professional Conduct. Call (619) 234-2833 today to schedule your free consultation with a California employment law attorney at the Mara Law Firm. (Cal. . California overtime law requires employers to pay eligible employees twice their rate of pay when those employees have worked more than 12 hours in a workday or more than eight hours on their seventh consecutive day of work. Co. (2005) 131 Cal.App.4th 260, 267 [“It is undisputed that the combined effect of these provisions of federal law is to preclude employers from docking the pay of an employee for an absence of less than a day (a partial-day absence). The employee must “plainly and unmistakably” meet the standard required for the exemption.⁠72 Otherwise, the employee should be classified as nonexempt. Code of Regs., tit. Code of Regs., tit. (a) [“Eight hours of labor constitutes a day’s work. is responsible for all communications made on this website. 8, § 11040, subd. According to the California labor law overtime statute, everyone is entitled to overtime pay, unless they meet one or more of the narrowly defined exemptions. (c) [excluding short-term productivity bonuses, bonus and profit-sharing plans that are not based on a fixed percentage of sales or profits, and “[t]emporary, variable incentive payments that increase, but do not decrease, payment under the written contract” from the statutory definition of a commission].↥, Memorandum re Overtime Exemption for Licensed Physicians and Surgeons (Oct. 22, 2019), available here (Opens in new window)↥, Labor Code, § 515.6 [“Section 510 shall not apply to any employee who is a licensed physician or surgeon, who is primarily engaged in duties that require licensure pursuant to Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code, and whose hourly rate of pay is equal to or greater than fifty-five dollars ($55.00). Understanding overtime laws in California is extremely important. 3, 11150, subd. Examples of duties that relate to management or general business operations include responsibility for marketing, research, budgeting, finance, accounting, purchasing, quality control, human resources, labor or government relations, regulatory compliance, and database administration.⁠29. (a) [“The Industrial Welfare Commission may establish exemptions from the requirement that an overtime rate of compensation be paid pursuant to Sections 510 and 511 for executive, administrative, and professional employees, if the employee is primarily engaged in the duties that meet the test of the exemption, customarily and regularly exercises discretion and independent judgment in performing those duties, and earns a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.”].↥, Labor Code, § 515, subd. .”].↥, Cuadra v. Millan (1998) 17 Cal.4th 855, 859.↥, See Code Civ. (3)(D), 11070, subds. The overtime period or extra hours for nonexempt employees begins after 8 hours of work per workday or after 40 hours of work per workweek. is an associate of Melmed Law Group P.C. Employees who get commissions instead of salary are often exempt from California’s overtime pay protections, as well. 453, 456] [“We have held that [FLSA] exemptions are to be narrowly construed against the employers seeking to assert them and their application limited to those establishments plainly and unmistakably within their terms and spirit.”].↥, Labor Code, § 515, subd. An employee who meets this test will be exempt from several rights, including: It is therefore important to carefully determine whether an employee meets all requirements of the test. 3.↥, Cal. 8, §§ 11040, subd. (a) [requiring employees to “customarily and regularly exercises discretion and independent judgment in performing” the duties of their job].↥, Nordquist v. McGraw-Hill Broadcasting Co. (1995) 32 Cal.App.4th 555, 562 [“Exemptions are narrowly construed against the employer and their application is limited to those employees plainly and unmistakably within their terms.”]; Arnold v. Ben Kanowsky, Inc. (1960) 361 U.S. 388, 392 [80 S.Ct. Code of Regs., tit. We strongly advise you consult with an attorney on whether you are an exempt or nonexempt employee. Of note, registered nurses who are employed to engage in the practice of nursing are not exempt professionals, but they might still be exempt as administrators or executives.⁠36, The Discretion and Independent Judgment Requirement, To qualify as an exempt employee, California’s Labor Code requires the worker to regularly exercise discretion and independent judgment in performing their duties.⁠37, An employee exercises discretion and independent judgment when the employee makes and implements important choices after considering competing courses of action.⁠38, An employee’s judgment is independent when it is free from immediate direction or supervision, even if an employee who is higher in the management chain has the authority to override the decision.⁠39. But some teachers at private schools are exempt even if they don’t meet those requirements. Under California's overtime pay laws, an employee is entitled to be paid overtime pay at a rate of time and one half for: (1) each hour worked over eight in a single workday; (2) each hour worked over forty in a single workweek, and (3) the first eight hours worked on the seventh day of work in … (2)(R).↥, Cal. An action upon any contract, obligation or liability founded upon an instrument in writing . (a); Cal. The exceptions to overtime pay are called “exemptions” because if you A claim for the breach of an oral contract must be filed within two years.⁠91, A claim seeking statutory penalties may also face a short deadline. This means that the minimum salary for exempt employees in California will also be increasing annually. This website and its content are not intended to be relied on as legal advice, and should not be relied on as such. (1)(A)(3) [defining professional employee under California law].↥, 29 C.F.R. 8, §§ 11010⁠–⁠11150, subd. Specifically, a delayed payment can result in a penalty of up to 30 days of the employee’s wages.⁠86 The unpaid wages accrue on a daily basis, not just for the days that the employee might have worked⁠—⁠but also on non-workdays. California employees are entitled to recover unpaid overtime plus interest against employers. Proc., § 337, subd. Commission payments constitute more than half of the employee’s total compensation. This means that the minimum salary for exempt employees in 2020 is either: These numbers are calculated by doubling the applicable minimum wage, multiplying that amount by 40 hours per week, the result of which is then multiplied by 52 weeks and divided by 12 months. This website contains "communications" within the meaning of rules 7.1–7.3 of the California Rules of Professional Conduct. Code of Regs., tit. (1)(A).↥, Labor Code, § 515, subd. California law provides for a variety of penalties for Labor Code violations. (2008) 167 Cal.App.4th 507, 513⁠–⁠514 [salary cannot be “subject to reduction because of variations in the quality or quantity of the work performed”], quoting 29 C.F.R. Our consultations are free and confidential. 1(C).↥, See Cal. While mandatory overtime is legal, it's important that you're careful with how you implement it. But, this exemption doesn’t apply to vocational instructors, daycare providers, student teachers, instructional aides, teaching assistants, tutors or … § 207; Labor Code, § 510, subd. Non-exempt employees are entitled to meal breaks and rest periods.⁠79 Employers who misclassify their employees as exempt commonly fail to provide the required breaks. However, employees can exercise discretion and independent judgment even if their decisions or recommendations are reviewed at a higher level.”].↥, Cal. This article takes a look at exceptions to overtime laws. §§ 395.1⁠–⁠395.13; Cal. The Department of Labor has proposed a rule to raise the minimum salary workers must earn to qualify for “white collar” exemptions from $23,660 per year to $50,440 per year. § 541.202(c) [“The exercise of discretion and independent judgment implies that the employee has authority to make an independent choice, free from immediate direction or supervision. Additionally, the employer may be obligated to pay the legal costs and attorney fees that the employee incurred while pursuing their overtime wages.⁠76, In some cases, there may also be a penalty of $100 or $200 per pay period in which California’s overtime laws were violated.⁠77 That penalty is normally payable to the State of California, but there are some situations in which the employee can recover up to 25% of it.⁠78. Outside of those particular exemptions, every other hourly worker in California is entitled to at least $9 per hour. Once they hit 12 hours a day, workers In California, the general overtime provisions are that a nonexempt employee 18 years of age or older, or any minor employee 16 or 17 years of age who is not required by law to attend school and is not otherwise prohibited by law from engaging in the subject work, shall not be employed more than eight hours in any workday or more than 40 hours in any workweek unless he or she receives one and one … Forcing overtime Proc., § 338, subd. (a)(2)(A)–(C).↥, Labor Code, § 515.5, subd. Sections 3 through 12 of the Orders (3 through 11 for Order 16-2001) do not apply. If they do, then the involved employees do not meet the salary basis test, and are nonexempt for purposes of overtime pay.”].↥, Negri v. Koning & Associates (2013) 216 Cal.App.4th 392, 400.↥, 29 C.F.R. 8, § 11140, subd. § 541.300 [defining professional employee under the federal FLSA]; Cal. This includes being subject to … Code of Regs., tit. Those include: This article explains these exemptions in greater detail, as well as what happens when employers fail to property classify their employees under California Law. This calculation gives us a monthly salary that is equal to twice the state minimum wage for full-time employment.⁠22. ; see also Collins v. Overnite Transp. (11)(B), (12)(B).↥, United Parcel Service, Inc. v. Superior Court (2011) 196 Cal.App.4th 57, 69.↥, Labor Code, § 226, subd. Any work in excess of eight hours in one workday and any work in excess of 40 hours in any one workweek and the first eight hours worked on the seventh day of work in any one workweek shall be compensated at the rate of no less than one and one-half times the regular rate of pay for an employee.”]; see also Labor Code, §§ 511, 514, 515.↥, Labor Code, §§ 210, 225.5; Labor Code, §§ 2698⁠–⁠2699.5.↥, See, e.g., Cal. 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