Do Salaried Emlpoyees Qualify for Overtime Pay?

by | Mar 6, 2012

Do Salaried Emlpoyees Qualify for Overtime Pay?

YOU ARE CLASSIFIED AS AN ‘EXEMPT’ SALARIED EMPLOYEE AND ARE TOLD YOU DO NOT QUALIFY FOR OVERTIME PAY;  HOW DO YOU KNOW THIS IS CORRECT?

As strange as it may sound, the ‘classification’ by the employer of any employee as salaried, ‘exempt’ versus non-exempt hourly has nothing to do with whether any given employee is properly classified as ‘exempt’ or non-exempt under federal or California wage law.  Nor does any long-standing practice by an employer; in other words, Employer ABC may have classified and paid Employee X as a salaried, exempt employee (with no tracking of actual hours worked and no overtime pay provided for work above 8.0 hours per day or above 40.0 hours per week) for 25 years – – Employee X may very well  always have been and may still be, under the law, a non-exempt, hourly employee.

All that matters when figuring out the correct ‘exempt’ versus ‘non-exempt’ classification of an employee is the ‘test’ under the law – – ie, the facts applicable to any employee’s work must be applied to the governing statutory and/or regulatory provisions, as modified or clarified by published case law, to determine if such employee is ‘exempt’ or conversely is a non-exempt, hourly employee.  THEREFORE THE ANSWER IS: CONTACT us for a free evaluation of your classification, and we can apply the legal test.

What is the test?  Under both the federal Fair Labor Standards Act (“FLSA”) and California wage law there are three primary types of salaried ‘exempt’ classifications: the Executive employee, the Administrative employee, and the Professional employee.  The Executive exemption requires the employee to supervise two or more other employees and have duties related to the management of the company. The Administrative exemption requires the job duties to be non-manual work related to the administration (as opposed to the actual work product) of the employer.  The Professional exemption requires either a professional license (doctor, lawyer, architect, etc.) or work based on a prolonged course of study or requiring advanced knowledge.

Beyond those distinctions, ALL three exemptions have two basic requirements: 1) the ‘salary test’; and 2) the ‘duties test’.  The salary test requires that the exempt employee receives a set, negotiated amount of pay (can be stated as annual pay, monthly pay or even hourly pay) which is provided regardless of the quantity and quality of the work performed.  With limited exceptions, an employer cannot make deductions from the pay of an exempt employee based on the amount of work performed.  The set pay must also be at least twice minimum wage pay.

The ‘duties test’ is really the point over which most misclassifications are litigated, since this test requires an exempt employee to customarily and regularly exercise independent judgment and discretion.  Whether such judgment and discretion is being used, versus an employee who, for the most part, is being micro-managed by supervisors, is a subjective evaluation which involves looking at all aspects of an employee’s work.

The exempt versus non-exempt ‘test’ may apply somewhat differently to each situation.  CONTACT OUR WAGE AND HOUR LAWYERS  if you are an employee OR an employer with a misclassification issue that needs to be evaluated.

Papers used by a Sacramento Wage Claim Lawyer

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