California’s wage and hour laws allow employers to classify workers as exempt or non-exempt. But, what does that mean, and can a misclassified worker sue their employer?
Non-exempt workers are typically paid by the hour, qualifying for overtime, meal breaks and rest periods. Exempt employees are not entitled to the same benefits guaranteed under the Fair Labor Standards Act (FLSA) and California laws.
Who is exempt?
As of Jan. 1, 2020, the minimum annual salary for exempt workers is $54,080 for companies with 26 or more employees. For those with 25 or fewer employees, the minimum is $49,920. Those figures will continue to rise through 2023 due to planned increases in the state’s minimum wage. But, exemptions also depend upon the type of job a worker performs. These include:
- Independent contractors
- Outside salespeople
However, persons with these types of job titles or descriptions are not automatically exempt. Likewise, workers paid an annual salary cannot necessarily be excluded from OT and other benefits.
California exempt employee criteria
Three basic requirements exist when determining whether a worker qualifies for exempt status:
- Employees whose duties focus on professional, administrative or executive functions for 50% or more of their hours worked
- In addition, they make independent work decisions using their discretion
- They meet the minimum annual salary requirement
Taking action against employers who misclassify workers
Employers who violate California and federal labor laws over classifying employees usually do so for financial gain. Employees may be confused over whether they have been misclassified. If you are unsure, contact an experienced wage and hour attorney, who will examine your work status. Companies face significant penalties, including back pay, overtime and compensation for missed meal and rest breaks.