Welcome to our 101 series! This is an opportunity for us at Felahy Employment Lawyers to share some general information and provide clarification about a few common misconceptions.
First off, you should know that nothing we will be discussing during the following series is considered a trade secret or something known only to lawyers and employers. These are your rights. This information is free and available to anyone who knows where to look.
Furthermore, this is not just a service for employees, of course, but these articles will also be useful to small business owners and administrators who want to become more familiar with their rights and responsibilities in the workplace.
If you've ever worked in retail or behind-the-counter, then you're probably already familiar with the mess that overtime can often be. It doesn't help that rules are as confusing for supervisors and managers as they are for employees. What really complicates the question is deciding whether or not an employee falls into the "exempt" category.
This part can be tricky. On the one end of the spectrum, a person making minimum wage doing manual labor is certainly a non-exempt employee. And at the other end, an executive with a six figure salary is certainly exempt. The confusion, obviously, lies in the grey areas in between.
As a rule of thumb, whether you're an hourly or a salaried employee, if you make twice the minimum wage or more, then you are probably exempt from rules regarding overtime pay.
The current minimum wage in CA is $10/hr, and will gradually be raised to $15/hr. by 2022; so anyone whose hourly rate can be calculated at more than $20 will probably be exempt from overtime. Over the next six years that figure will increase to $30. For example: a salaried employee making $35,000 in 2016 annually may still be entitled to overtime pay, but an salaried employee making $50,000 annually will not.
Determining your hourly rate, however, is not the a clear-cut way of determining employee exemptions. California law has two specific caveats to exemption rules. One is for professional and administrative workers, the other is for actors and creative professionals; all of which qualify as exempt.
The administrative and professional sub-category exempts a large number of white-collar workers from overtime benefits. Generally speaking employees who do not perform manual labor as the main function of their position, and "who customarily and regularly exercise[s] discretion and independent judgment," (source) or whose profession can be categorized as "learned or artistic" (ibid.) are exempt from overtime laws.
Licensed professionals, including doctors, lawyers, engineers, and teachers, are also exempt from overtime according to California law. Furthermore, if one's work can be described as "work that is original and creative in character in a recognized field of artistic endeavor," or "whose work is predominantly intellectual and varied in character (as opposed to routine mental, manual, mechanical, or physical work)," that would make one exempt from overtime pay.
There is no one rule to follow when determining exemption or non-exemption; an exhaustive list of exemptions can be found here. I have tried to paraphrase as much as possible in this article for the sake of making this complicated issue most digestible to a general audience, but if you are still confused please follow the in-text links for a more detailed look at California overtime law. Here is a good place to start.