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California Overtime Laws: What Exempt and Nonexempt Employees Should Know

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While the holiday season is often brimming with joyous events, feelings of togetherness and selfless deeds, some California employees may find themselves working for Scrooge-like employers who fail to comply with overtime and holiday pay laws. In fact, employers often intentionally misclassify their employees as exempt instead of nonexempt in order to avoid their legal obligations to paying overtime to nonexempt workers. The good news is that California laws provide greater protections than federal requirements for employees who are subjected to these unlawful employer behaviors.

But before you decide to sue your employer for failure to pay overtime or contact a wage and hour attorney, you should first educate yourself on what it means to be an exempt or nonexempt employee in California, and how each classification relates to overtime and holiday pay.

california-overtime-laws-exempt-nonexempt-employees.jpg

While the holiday season is often brimming with joyous events, feelings of togetherness and selfless deeds, some California employees may find themselves working for Scrooge-like employers who fail to comply with overtime and holiday pay laws. In fact, employers often intentionally misclassify their employees as exempt instead of nonexempt in order to avoid their legal obligations to paying overtime to nonexempt workers. The good news is that California laws provide greater protections than federal requirements for employees who are subjected to these unlawful employer behaviors.

But before you decide to sue your employer for failure to pay overtime or contact a wage and hour attorney, you should first educate yourself on what it means to be an exempt or nonexempt employee in California, and how each classification relates to overtime and holiday pay.

Exempt and Nonexempt Employees in California: What's the Difference?

Under California law, employees working in the state are presumed to be nonexempt employees. This means that California employees are not exempt from Labor Code requirements such as overtime pay, meal periods, rest periods, and minimum wage. Exempt employees in California are classified as such due their "exempt" status from select wage and hour requirements that reflect their job duties and pay. Employees need to meet very specific requirements for exemptions, and if they do not, then employers need to comply with wage and hour requirements under California law - including overtime pay.

Exemptions from California labor laws and regulations are governed by statutes and regulations found in California's Labor Code and in wage orders from the Industrial Welfare Commission (IWC). These wage orders that are now amended by the Department of Industrial Relations (DIR), exempt mostly white-collar jobs from Labor Code provisions. The federal Fair Labor Standards Act (FLSA) provides exemptions that are similar to those of California, but California laws are more generous to employees. This means that California labor laws typically meet federal labor laws more often than not.

To be considered an exempt employee in California, the employee must meet all of the following requirements:

  • The employee must perform work that is administrative, professional, or executive in nature.
  • The employee must make at least two times the state minimum wage for full-time employment.
  • The employee must spend more than half of their work time performing duties that fall under one of the exemptions.
  • The employee must regularly exercise discretion and independent judgment while performing their exempt duties.

If any of these criteria are not met by California employees, then they are considered nonexempt in the face of California overtime laws. Of course, there are also exceptions for certain industries, such as computer-related professionals, taxicab drivers, outside sales people, and private school teachers. Learn more about all exceptions categories by clicking here.

What is Considered Overtime in California?

Under California law, overtime provisions state that nonexempt employees 18 years of age or older, or minor employees 16 or 17 years of age who aren't required by law to attend school or not prohibited by law from engaging in work, must be paid one and one-half times their regular rate of pay for all hours worked over eight hours in any workday, or over 40 hours in one workweek. However, there are both exceptions and exemptions to California overtime laws, which the Department of Industrial Relations provides online.

How Does Employment Status Affect Holiday Pay Laws in California?

You may be surprised to know that under California law, employers are not required to provide nonexempt employees with holiday pay when the business is shut down. And if you do work on a holiday, your employer does not have to pay a special premium for work performed that day, other than the overtime premium required for work performed in excess of eight hours per workday or 40 hours per workweek.

As for exempt employees in California, they must be paid their full weekly salary if they perform any work during the week of a holiday shutdown. But if you are an exempt employee and your workplace shuts down its operations for a full week, your employer is not required to pay you that week.

Of course, there are exceptions to these laws as some employers have their own policies in place that allow for both nonexempt and exempt employees to be paid for holidays. So always check with your employer to be sure of any alternative agreements or policies related to holiday pay in your specific workplace.

Additional Information on California Overtime Laws:

If you feel your employer is violating California overtime laws, the expert employment attorneys at Hennig Ruiz are here to fight for your employee rights. Contact us today for your free consultation.

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