Clarifying California’s Overtime Exemption Laws

For California business owners, figuring out overtime exemption laws can be difficult. There are a long set of qualifications for who is exempt and from what they are exempt. These exemption laws were created to make it easier for employees to work odd hours at their own discretion when circumstances required such flexibility. Today we’ll be clarifying the overtime exemption laws so your business can ensure it remains in compliance.

Who is exempt?

A portion of the Labor Code focuses mainly on “white collar” workers, such as executives or computer technicians who may work outside of regular hours. Because their work necessitates a non-standard schedule, these employees are exempt from the normal overtime requirements. The standard overtime laws do not apply to these employees, such as requiring overtime pay for a salaried, on-call technician who may work more than forty hours one week but only twenty the next and/or outside of the standard 8-hour workday.

The law specifically names a few categories of employees who may be exempt, provided they meet the other requirements:

Executive and administrative employees
Doctors and nurses
Computer technicians
Government employees
Truck drivers
Ambulance drivers

Additionally, there are 3 main requirements that must also be met for an employee to be exempt:

Their duties must be primarily administrative or professional.
Their salary must be at least double the state’s current minimum wage for full-time work.
Their duties must require acting independently and at their own discretion regularly.

What are they exempt from?

First, these employees are exempt from minimum wage laws. Because one of the requirements to be exempt is that the employee is both salaried and paid at least double the state’s minimum wage, this isn’t an issue.

Exempt employees also do not receive overtime pay for working more than eight hours in one day or forty hours per week. These employees usually don’t work typical schedules, and may work more than eight hours in a day but substantially less the next.

Rest breaks and meal breaks are not granted to some exempted employees. It is important to note that these breaks are still required even for some of those exempted. Because they usually take meals as a part of their workday, or may not even be working during their usual lunchtime, a specified amount of time delegated to these employees for breaks or meals would only serve to restrict them. Instead, it is assumed that breaks and meals are worked into their schedule.

Ensure your business classifies your employees correctly

This is by no means an exhaustive list of the necessary requirements to decide if an employee is exempt from California’s overtime laws, so as usual, experienced legal counsel is highly recommended to ensure your business is compliant with the law. For any questions about how to classify and keep records for your employees, contact Integrated General Counsel today.