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Which employees are exempt from mandatory overtime laws?

The right of California workers to receive additional compensation for overtime work is protected by two statues: the Federal Fair Labor Standards Act and the California Labor Code. Both statutes require employers to pay extra compensation for all work in excess of 8 hours per day or 40 hours per week. The extra compensation is set at one-and-one-half times the employee's regular rate of compensation.

Both statutes provide exemptions from the mandatory overtime requirements for certain classes of workers, and the application of these exemptions - often referred to as wage and hour disputes - has been a source of confusion and controversy from the first enactment of these laws. An employee is exempt from the mandatory overtime provisions in both laws if he or she meets the following tests:

  • Is paid $23,600 per year ($47,476 after December 1, 2016)
  • Is paid a salary and not an hourly wage and
  • Performs exempt job duties

The last requirement generates most of the controversy over who is exempt.

The test is applied by looking at an employee's actual job duties, not his or her job title. To be classified as exempt, an employee must supervise at least two other employees and actively participate in the management of the business. Professional employees, such as lawyers, physicians and teachers are considered exempt. Employees who perform administrative duties, such as human resources management, and exercise independent judgment and discretion regarding matters of significance to the business may also be classified as exempt.

If an employee does not satisfy all of the requirements for exempt employees, he or she is entitled to receive overtime compensation. A non-exempt employee who has not received overtime pay can sue the employer in state or federal court to recover the unpaid overtime; if the suit is successful, the employee can be reimbursed for attorneys' fees and receive an award of punitive damages. An employee with questions about his or her exempt status may wish to consult an attorney who specializes in handling cases under the state and federal overtime laws and regulations.

Source: FindLaw.com, "Exempt Employees v. Nonexempt Employees," accessed on July 25, 2016

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Law Offices of Allan A. Sigel, P.C.

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