Exempt vs. Non-Exempt Employees in California: Employment Law

exempt employee california

When employers fail to properly distinguish between their non-exempt and exempt employees under federal and California labor laws, non-exempt employees frequently go underpaid.

In addition, the employer profits from avoiding minimum wage and overtime laws.

In such cases, the employees may have a claim against their employer for back wages and statutory penalties.

Navigating employment law can be overwhelming and treacherous.

If you think you have been unlawfully denied the California minimum wage, you should seek experienced legal help. 

Am I a Non-Exempt Employee?

The differences between exempt versus non-exempt in California come down to an employee’s level of compensation and their job description. Exempt employees generally must meet three criteria: 

  • You earn at least twice the minimum wage;
  • You have “white collar” duties; and
  • You have task discretion.

When all three criteria apply, you are “exempt.” This means your employer generally has no obligation to pay you overtime, or provide you with paid rest breaks.

California does provide for unpaid meal breaks for both classifications of employees. Let’s take a closer look at these criteria.

Your Salary Is at Least Twice the Minimum Wage

The California minimum salary for exempt employees in 2021 is at least twice the minimum wage.

Currently, the minimum wage for businesses with 26 or more employees in California is $14 per hour. The minimum wage for businesses with fewer than 26 employees is $13 per hour.   

You Have “White Collar” Duties

To be considered exempt, you must have “white collar” duties. In general, there are six categories of “white collar” jobs including:

  • Executive,
  • Administrative,
  • Professional,
  • Computer professional, and
  • Highly compensated. 

An example of an exempt employee in California would be a physician or computer engineer, while an example of a non-exempt employee in California might be a utility crew driver or warehouse stocking clerk.

The latter category is normally covered by wage and hour laws. 

You Have Task Discretion  

To be exempt, you must have the right to exercise discretion and independent judgment in performing your duties. 

What Are My Rights as a Nonexempt Employee?

Your entitlements as a non-exempt employee can be classified into three general categories.

Minimum Wage Rights

While the federal minimum wage is set at a mere $7.25 per hour, California law is nearly double that amount.

As of January 1, 2021, the minimum wage for businesses with 26 or more employees is $14 per hour. The minimum wage for businesses with less than 26 employees is $13 per hour.   

Note that some California municipalities set their own minimum wage. For example, an employee’s nonexempt salary in San Francisco must be at least $15.59 per hour.  

Overtime Rights

Employers in California must pay nonexempt employees for any work over 40 hours per week. Employers must also pay overtime for any work over eight hours in a single shift or more than six days in a week.

Meal and Rest Break Rights.

Non-exempt and exempt employees alike are entitled to 30-minute unpaid meal breaks for shifts over five hours. Employers are required to provide a second meal break for any shift over ten hours.

Employees must be relieved of all job responsibilities when on meal breaks. Employers must pay for the meal break if the employee is required to stay on the property.

California employers must also provide nonexempt employees with paid rest breaks. Employers must provide them with ten minutes per four-hour work period.

Employers are not required to provide a rest break for shifts less than three-and-a-half hours.

What Are Exempt Employee Rights in California?

Exempt employees in California have fewer rights than non-exempt employees in California.

While the California minimum salary for exempt employees in 2021 remains twice the California minimum wage, exempt employee rights do not include mandatory overtime or paid rest breaks.

However, exempt employees, like nonexempt employees, retain the right to a safe and healthy work environment, equal employment opportunities, and freedom from workplace discrimination.

What If My Employer Wrongly Classifies Me as Exempt?

If you have been improperly classified and therefore improperly paid, you may be entitled to back wages including overtime and missed rest break compensation.

For example, California penalizes employers by requiring them to pay non-exempt employees for one hour of their normal wage for any missed rest breaks in a single shift.

What Is a Wage Claim?

If you can’t work it out with your employer, you can file a wage claim with the California Division of Labor Standards Enforcement.

Workers in California have the right to file a wage claim when their employers refuse to pay them the wages they are owed. A wage claim starts the process to collect on the unpaid wages.

Note that California’s labor laws apply to all workers regardless of immigration status.

File a Lawsuit

In the alternative, you can file a lawsuit in court. If you are successful, your employer may have to pay your attorney fees and court costs.

You should be able to sue based on your employment contract. California courts recognize an implied covenant of good faith in nearly all employment contacts (the exception would be “at-will” employment).

An employer breaches the implied covenant of good faith and fair dealing by acting in bad faith to prevent an employee from enjoying the benefits of their employment contract.

In some cases, you may also have a claim under the California Unfair Competition Law. This law broadly prohibits all “unlawful, fraudulent or unfair” business acts or practices.

Don’t Let Your Claim Expire

You must take care not to wait too long to file your claim. California state and federal courts have strict deadlines for litigating a back wages case.

In general, the following time periods apply to wage claims and lawsuits in California:

  • Within two years for an oral promise to pay more than minimum wage;
  • Within three years for violations of overtime, minimum wage, unpaid rest and meal breaks, sick leave, unpaid reimbursements, and illegal deductions;
  • Within four years for a written contract; and
  • Within four years for a violation of the California Unfair Competition Law.

A non-exempt employee’s right of action vests on the date the debt became due. This is normally on payday.  

Rely on Experience for All Your Employment Law Matters

For California employers, correctly classifying exempt versus nonexempt employees can mean the difference between a lawsuit and no lawsuit.

Are you concerned whether you have been properly classified and therefore properly paid as an employee?

Contact the experienced attorneys at Starpoint Law. Our mission is to provide our clients with the highest and most professional experience when dealing with complex legal situations.

Navigating a California employment lawsuit can be perilous and overwhelming. Don’t go it alone. 

Author Photo

Aidin Ghavimi

Aidin is a partner at Starpoint LC, Attorneys at Law, and focuses on personal injury cases in and around Southern California. He earned his Juris Doctorate from Loyola School of Law and his Bachelor’s from USC. Aidin’s primary goal is to bring justice to his clients and to ensure they are able to move on with their lives after a serious injury.

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