Overtime Pay Exemptions

The overtime pay exemptions are complicated and often misapplied by employers. The exemptions are specified under the California Labor Law, and the exemptions take several forms. The basics of the exemptions are covered below, but keep in mind that this is an overview of the law.

The Administrative Exemption

This applies to an employee who performs non-manual work or office work that is directly related to implementing the management policies of their employer. This exemption creates a fine line, but generally an employee without managerial or supervisory responsibilities whose work does not require professional credentials may qualify for overtime pay.

The Executive Exemption

This applies to an employee whose duties involve actual and consistent management of activity or a department and who has wide latitude in doing so. The employee must be full-time and salaried and must earn at least twice the California minimum wage.

The Professional Exemption

This applies to two groups of employees. The first group is comprised of people who hold licenses granted by the state certifying that they can perform certain tasks. People engaged in the practice of law, dentistry, medicine, architecture, engineering, accounting and teaching are included in this group. An employee must be salaried to be included in this group. It should be noted that pharmacists and most nurses are not included in this exemption, and they may be entitled to overtime pay.

The second group of employees that may be included in this exemption are employees engaged in the artistic or learned professions. A learned professional exemption requires learning above the high school level, but they are not required to a have post-graduate degree. The learning must be in the academic disciplines of the sciences, and it must be a condition of employment. Some highly-paid computer specialists may be exempt under this classification even if they are paid hourly.

The Outside Salesperson Exemption

This applies to an employee who spends most of their time away from the office and makes sales calls. The employee may or may not be paid a commission, and they are not subject to double the minimum hourly wage requirement. The employee is still considered exempt if they don’t make their sales goals. Some delivery drivers who sell something can also be included in this exemption.

The Computer Professionals Exemption

Computer professionals have a unique set of guidelines. This employee may fall under the Administrative Exemption, but if they work on design and analysis for over half of their work time, then they may be eligible for overtime pay. Hardware, IT, and help-desk employees are usually non-exempt and are eligible for overtime pay.

The Caregiver Exemption

Caregivers who work in a care facility are usually non-exempt unless they are nurses. If more than 20% of your work hours are spent cleaning, driving or changing bed linens, then you may be eligible for overtime pay.

A Caveat

Employees who are paid hourly at less than twice the minimum wage are certainly eligible for overtime pay for hours worked after 40 hours.

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