Are you exempt from overtime? Take the quiz to find out!

Misclassification is when your employer incorrectly classifies you as exempt from wage and hour laws governing your hours worked and how you must be paid for those hours. The “default” rule is that every employee is entitled to things like overtime, minimum wage, meal breaks, and other basic wage and hour protections. Exempt employees are literally exempt from these requirements. In California as well as under Federal law it is the employer’s burden to prove you are exempt. It is one of the most common (and costly) wage and hour mistakes.

So, how do you figure out if you are exempt from overtime? It boils down to an analysis of your job duties, how you spend your time, and how you are paid. I get into more detail in each exemption category linked at the end of the article and also found here. Let me dispel some common errors:

  • You are not exempt just because you are paid a salary;
  • You are not exempt just because you manage other employees;
  • You are not exempt just because you directly assist a C-level executive;
  • You are not exempt just because you perform some classically professional function, like accounting or providing tax advice (and Bookkeepers are generally not exempt);
  • You are not exempt just because of your job title;
  • You are not exempt just because your employer classifies you as exempt.

In 2004, when the US Department of Labor made major changes to Federal Wage and Hour laws, it was estimated at the time that out of 134 million workers in the United States, 19.5 million were excluded from Fair Labor Standards Act (“FLSA”) protections altogether, 45.8 million were “salaried,” and the remaining 69 million were paid hourly.  While it is a common misconception that being paid on a salary means you are exempt from overtime, odds are that a significant portion of those salaried workers, if not almost all of them, were classified as exempt by their employers. (Otherwise, why pay them a salary?)

Exempting almost half of the American workforce from overtime was never the intent of Congress when they originally passed the FLSA following the Great Depression. The intent of Congress in enacting the FLSA was to increase employment by encouraging employers to hire more workers, rather than demand long hours from current employees, and to protect “blue-collar” low wage workers that were working oppressive working hours. If you were in a high level position and were well compensated, you were more likely to be in demand, have more job security, and have better bargaining power in your working conditions. If you were a low wage worker however, you were likely replaceable, had little to no bargaining power, and thus had little to no chance to make your employer voluntarily pay you more for working long hours.  In 1937 (and in the decades that followed when the first Federal Regulations were drafted explaining FLSA exemptions) the American economy was very different than it is now. Industrial and factory jobs were far more prevalent, and in these jobs the delineation between the blue collar production worker and the white collar bosses and supervisors and administrators was easier to spot. Similarly, “office” jobs were limited to more classically “professional” jobs like accountants, lawyers, or financiers. Today, the world is vastly different. Service jobs have replaced factory jobs. More people are in the office than the factory floor. Nonetheless, the old exemption categories remain, albeit with layers and layers of added complexity, and employees and employers alike are left confused as to their application.

There are numerous categories of exempt employees in California, but most exemption classes fall under one of the following categories:

There are other specific exemption classes, such as sheepherders, babysitters, movie projectionists, and taxi-cab drivers. The California Wage Orders are replete with niche exemption categories, all of which have very stringent requirements. Click one of the above categories to learn more.


Independent Contractors

Independent Contractor?

Lots of employers try and get around wage and hour law by classifying their workers as independent contractors. This can be a very costly mistake, particularly with California’s new law fining employers $25,000 for intentionally misclassifying their employees as independent contractors. (It also makes them tell the world they have been naughty by publicly posting the fact they were penalized. A little public shaming can go a long way sometimes.)

Qualifying as an independent contractor is difficult. In California, the most significant factor to be considered is whether the employer has the right to control the worker’s final product, and the manner and means in which the work is performed.  For example, think of a McDonald’s employee working the cash register versus an artist commissioned to create a sculpture for a park. McDonald’s has very specific things that it needs its cashiers to do on a very specific schedule set by McDonald’s. McDonald’s cashiers have to wear McDonald’s uniforms, sell McDonald’s products, work McDonald’s hours, and even speak to customers the way McDonald’s wants them to. The artist creating the sculpture, however, is commissioned to use his or her creativity and artistic talent to create something unique. The owner of the park has no say in how he or she does it or what the final product looks like (beyond generalities such as requesting a sculpture of a person rather than a duck). The artist can come and go as he or she pleases so long as the work gets done by a specified date within a specified budget.

Of course most situations are not that cut and dry. Additional factors that may be considered depending on the job are:

1. Whether the employee is performing work distinct from the employer.

2. Whether the work is a part of the regular business of the employer.

3. Whether the employer supplies the instrumentalities, tools, and the place to do the work. For example, the McDonald’s cashier uses McDonald’s point of sale device, works at the McDonald’s restaurant, and wears McDonald’s clothes. The artist uses his own tools and might create much of his work at his or her own studio.

4. Whether the worker is invested in the tools and instrumentalities the worker uses for the work;

5. Whether there is a special skill involved in the work;

6. Whether the worker shares in the profit or loss depending on the worker’s performance;

7. Whether the work is of a set duration or an indeterminate period of time;

8. Whether the worker is paid per job or by time worked;

9. The intent of the parties.

Although the intent of the parties is relevant, employers often think that if they simply have the employee sign an “independent contractor” agreement, this magically make the employee an independent contractor. Such agreements are not determinative and are given little weight by courts.

I can usually tell if someone is an independent contractor or not very quickly. Sometimes it is a little more complicated. Usually, it is an unscrupulous employer trying to save a couple bucks with an unsuspecting (or uncaring) employee. If you are a so-called “independent contractor,” I’d like to talk to you.


The Fair Labor Standards Act (FLSA) vs. The California Labor Code

There essentially two different sets of wage and hour laws that are both applicable to California employers. The Federal Fair Labor Standards Act (commonly known as the “FLSA,” and sometimes pronounced “flis-a”) and the California Labor Code. There are a variety of similarities and differences between these two laws.

The overarching distinction is that California wage and hour law trumps Federal law when California’s laws are more protective. For example, although under Federal law the minimum wage is $7.25 per hour, since California has a higher minimum wage of $9.00 per hour, California law trumps Federal law. Similarly, California allows for daily and weekly overtime, whereas under Federal law you are only entitled to overtime if you work over forty hours in a week, no matter how many hours you work in a day.

There are also several important differences when it comes to whether employees are considered “exempt” or “non-exempt” from overtime and minimum wage standards.  It is generally harder for an employee to qualify as exempt under California law than under Federal law. This is good for employees. One of the most important distinctions is that in California, an employee must actually spend more than half of his or her time performing exempt duties (such as making sales). Under Federal law, courts will look to the “primary duty” of the employee’s job. This is sometimes referred to as the “qualitative (Federal) vs. quantitative (California)” approach. In practice the Federal standard gives employers much more wiggle room to create idealized job descriptions and then simply claim the employee fell short of expectations.

Here’s a handy-dandy cheat sheet of some common differences between Federal and California wage and hour law:


  • Minimum wage is $9.00 per hour.
  • Tips cannot be counted against the minimum wage; if you are a tipped worker, you still must receive at least $9.00 per hour for every hour worked.
  • Employers must provide a meal break of at least one half hour on any shift that lasts at least five hours.
  • Employees are entitled to daily overtime of one and a half times their regular hourly wage for any hours worked over eight in a day, or any hours worked on the seventh consecutive workday in a single workweek up to eight hours. Employees are owed double their regular hourly wage for all hours worked after twelve in a day, or any hours worked after eight on the seventh consecutive workday of a single workweek. California employees are entitled to recover unpaid overtime plus interest against employers.
  • Exempt employees must be paid on a Salary basis of at least twice the current minimum wage per week.
  • Courts utilize the “primarily engaged” test to determine if an employee performs work qualifying as exempt; exempt employees must perform exempt duties at least 50% of their time, unless the employer can show the employee was not performing up to the realistic expectations of the job.
  • When an employee is separated from employment (whether they quit, are laid off, retire, or are fired) the employee is entitled to full payment of all owed wages upon separation from employment. If the employer fails to give the employee all of their owed wages immediately (if you are fired) or within 72 hours (if you quit) you are entitled to “waiting time penalties” equal to a normal days wages for every day that your employer fails to pay you.
  • There is no “highly compensated employee” exemption; you must qualify for all of the relevant exemption criteria for your job category.
  • Very strict restrictions on deducting money from paychecks. Generally, the only permissible deductions are for benefits. Deductions from commissions or wages for unidentified returned items, broken employer property, overpayments of wages, or for loans are prohibited.
  • Definition of employer and employment is broader, thus more entities and individuals can be liable for employment violations.

Federal Law

  • Minimum wage is $7.25 per hour.
  • Up to $5.12 per hour in tips can be counted against the minimum wage, meaning a tipped worker can be paid as little as $2.13 per hour.
  • No meal break requirement.
  • Employees are only entitled to overtime if they work over forty hours in a workweek. Employees are entitled to liquidated damages of double their overtime damages if Employers willfully fail to pay overtime. California has no such damages provision.
  • Exempt employees must be paid on a salary basis of at least $455 per week.
  • Courts utilize the “primary duty” test to determine if an employee is expected to perform exempt duties. In practice, compared to the California test this gives employers more leeway to argue that employees are exempt based on job titles and written job descriptions, rather than what employees actually do all day.
  • There is no law penalizing an employer for failing to immediately pay wages upon termination, other than the underlying wage violation.
  • Employees earning over $100,000 per year are generally exempt. Although the burden still rests with the employer to prove the employee is exempt, the standards for making this determination are much less rigorous for such “high compensated” employees.
  • Employers have more leeway to make deductions, and have a good faith “safe harbor” for deductions made in error.
  • Definition of employer and employment is more narrow, making it harder to make more employers liable in joint employer situations.

Questions? Contact me, why don’t ya.


California Minimum Wage

california farmworker rights

California Workers

Every California employee is entitled to at least the minimum wage. What is minimum wage? Currently, California minimum wage is $9.00 per hour. It will increase to $10.00 per hour on January 1, 2016. Several local cities and counties have higher minimum wages, such as San Francisco, which has a minimum wage of $10.74 per hour.

There are a lot of misconceptions about minimum wage laws. Let me dispel some of them here:

  • Unlike under Federal law, if you receive tips, your employer cannot credit your tips against the minimum wage. You must receive at least the minimum wage for every hour worked, without exception.
  • You cannot agree to work for less than the minimum wage. Any such contract is illegal.
  • Any unpaid hour of work is a minimum wage violation in California. Unlike Federal law, in California there is no “averaging” of a day’s wages. This is all explained in the case of Armenta v. Osmose, Inc. It does not matter if your daily wages add up to more than the minimum wage when averaged against your total hours worked in a day. If you worked an hour for which you were not paid, that is a minimum wage violation. I see this come up a lot in wage and hour litigation.
  • Adults and minors both must be compensated by at least the minimum wage. There is no difference.

In California, if you are owed minimum wages, you may also collect double whatever you are owed thanks to Labor Code section 1194.2.  If you think you might be the victim of a minimum wage violation, contact my office for a free consultation.

Overtime Wages

In California, employees are entitled to both daily and weekly overtime wages, whichever is greater.  Pursuant to California Labor Code section 510 and 1194, California employees are entitled to one and a half times their regular wage for all hours worked over eight in a day, and double their regular wage for all hours worked over twelve in a day. Additionally, if you work seven days in a row, on your seventh day you must be paid at least one and a half times your regular wage for your first eight hours of work, and double your regular wage for all hours worked over eight.

Even if you do not work over eight hours in a day, if you work over forty hours in a week, you are still entitled to one and a half times your regular wage.

There are some exceptions to the above general rules.  For instance, some employees are considered “exempt” (e.g., doctors and lawyers) and are not entitled to overtime.  Misclassification of non-exempt employees as exempt employees is a very common source of overtime violations. If you would like to know if you are entitled to overtime, contact me for a free evaluation of your case.

Wage & Hour Violations

California wage and hour law regulates how and when employees are paid. California has some of the strongest wage and hour protections in the country. As an employee you have a huge number of important rights when it comes to getting paid for your work. Some of the most common types of cases I come across are:

  • Failure to pay overtime wages;
  • Failure to pay minimum wages;
  • Failure to provide meal or rest breaks;
  • Off the clock (unpaid) hours;
  • Failure to pay all wages due every payperiod;
  • Failure to provide accurate employee paystubs;
  • Unpaid commissions;

If an employer fails to pay you all the wages you are owed for your work, not only are you entitled to your owed wages, you may also be owed additional penalties on top. These penalties are meant to discourage intentional wage theft by severely punishing willful violations of the law. In some cases, violating California wage and hour law is even a crime.

Wage and hour violations come in all shapes and sizes, from small individual claims before the Labor Commissioner to multi-million dollar class actions spanning thousands of employees. I have extensive experience in this area and would like to hear from you if you think you are being underpaid.




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