The Difference Between Exempt and Non-Exempt Employees in California
There are several lawsuits which have resulted from misclassification of employees by employers. Some employers classify employees as exempt while they are clearly nonexempt. To avoid getting on the wrong side of the law, employers should carefully analyze their employees’ work duties or receive advice from experts such as experienced human resource professionals and attorneys.
Generally, the laws of the State of California presume all employees as nonexempt. Nonexempt employees strictly adhere to California’s Labor Code. In other words, they are not exempt from factors such as overtime pay and the minimum wage. On the other hand, as the name suggests, exempt employees are exempt from certain wage and hour requirements because of their pay and duties.
Job Titles
More than 50% of the time of exempt employees is spent performing exempt duties. It should be noted that job titles are irrelevant. Having a big title does not guarantee or meet the threshold of classifying an employee as an exempt employee. For the Labor Commissioner to determine whether an employee is exempt or nonexempt, he or she looks into the duties performed by an employee during workweeks. Sales employees must earn at least twice the minimum wage every month for full-time employment.
Exempt Employee Duties
Mostly, employees classified as exempt employees exercise independent judgment and discretion in performing their duties. For example, they may fire and hire other employees. They have management duties that involve directing the work of other employees or departments in an enterprise. They make crucial decisions after considering various possibilities.
Exempt employees are paid for a full week salary whenever they perform their duties any week. As such, there are limited deductions to an exempt employee’s salary. If there is the unavailability of work at any given time in a week, as long as the exempt employee was ready to work, he or she is still entitled to a full week of pay.
Managerial and administrative employees are considered as exempt employees unless they do not meet certain requirements. They are strictly classified as nonexempt employees if they do not meet these requirements. Note that not all professional employees are classified as exempt employees. There are legal requirements that they must meet for them to be classified as such.
Artists
According to a California law amendment in the year 2000, some computer professionals have an overtime exemption. The situation is different with artists since they self-employed meaning that they have the control over the nature of their work. In the case of sales members, they are classified as either outside or inside salespeople for simplicity in classifying them as either nonexempt or exempt employees. For easy evaluation and differentiation between nonexempt and exempt employees, one may use the exempt/nonexempt wizard tool or nonexempt vs. exempt forms and checklists.
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