Exempt vs Non-Exempt in California

Exempt vs Non-Exempt in California

Wages and employment laws in California are stricter than in many other states. While in many states, Exempt employees are determined by their job titles, in California the same is done through a strict framework.

There are many examples of Class Action lawsuits resulting from misclassification of employees in California.

The process of classifying an employee as Exempt is overseen by the Labor Commissioner in California. The commissioner examines the work done by the workers during the workweek. So mere job titles are not enough requirement for an employee to be put into the Exempt bracket. Being put into the Exempt bracket may help employers since they may not need to pay overtime pays at the rate of 1.5 times their regular pay to these employees.

This is why the idea of exempt vs non-exempt in California is a matter of great significance.

Exempt Vs Non-Exempt Guidelines in California

There is a framework of guidelines that determine whether an employee falls in the exempt or non-exempt category. It includes strict duties like testing, job title relevance, Labor Commissioner’s considerations, deductions from salary etc.

  • Strict Duties TestTo be considered as an exempt employee in California, he or she needs to meet a Strict Duties Test. The test mainly considers whether the employee performs more than fifty percent of his time in performing exempt category jobs.
  • Job Title Relevance
    Job titles don’t determine a California employee’s status as exempt or non-exempt. An employee may not qualify to be an exempt employee, if his duties are in deviation to the requirements of the exempt category.
  • Labor Commissioner’s Determination
    To determine whether an employee is eligible to be put in an exempt category, the Labor Commissioner scrutinizes the job performed by employees during a workweek.
  • Salary Considerations
    An Exempt employee must earn a monthly salary of not less than twice the minimum wage of the state for full-time employment. Merely paying a salary does not entitle the employer to exempt some employees from paying overtime pay.
  • Independent Judgment and Discretion
    To be billed as Exempt in California, employees should be in a position where they have the authority and ability to exercise independent judgment and discretion in their jobs regularly.
  • Salary Test
    This test looks for deductions made from an employee’s salary. No deductions should be made from salary even if work is unavailable due to operational requirements of the organization. Workers must also be willing, able and ready to work.

Profile of Employees in Exempt Category in California

Broadly speaking, the profile of the work of exempt employees in California are the same as those in federal laws.

  • Executive Employees
    This is for employees in managerial positions. Nevertheless, managers too need to meet requirements for such exemption.
  • Administrative e Employee
    This is meant for employees whose jobs are administrative in nature. Nevertheless, it depends on the Labor Commissioner to determine whether a worker is doing administrative job or not.
  • Professional Employees
    People must meet specific legal requirements to be put under the exempt bracket for professional employees. Computer professionals are not in the exempt category, but there is an overtime exception for them.

Other exempt categories include salesperson and artists.

These are some of the differences between Exempt and Non-exempt in California. Also, with the above information, one can know which employee is considered as Exempt employee.


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