Exempt and Non-Exempt Employees–Compensation for Unpaid Overtime in California
Employees are entitled to overtime pay in California for extra hours worked in a work day, workweek, or eight hours worked on the seventh day of the work week. Overtime pay is calculated at a rate of one and a half the usual wage rate. Workers are also entitled to a double rate for any extra hours worked above twelve or each hour worked above eight on the eight days of a work week. Employees have a right to recover unpaid overtime in California–meaning they can file legal action against their employers for the same. Exempt and Non-Exempt Employees Not all employees qualify for overtime pay under the Fair Labor Standards Act (FLSA). Employees who qualify for OT pay are called non-exempt employees while the rest are called exempt employees. These two classifications of employees are differentiated by the following factors: Amount of money earned; Nature of duties; Type of contract, and more. So, who is considered exempt under California Labor Laws? These are workers who are not protected by Labor Laws–meaning they have no right to:
Minimum wage; Rest and meal breaks; and Overtime pay. Exempt employees may be required by their employers to work more than eight hours in a workday or 40 hours in a workweek without extra pay or work breaks. To be considered exempt, your salary should be a minimum of $684 per week. The Fair Labor Standard Act
The Fair Labor Standards Act establishes the following: Minimum wage; Eligibility for overtime pay; Youth employment guidelines; Record keeping guidelines; and Employment laws for the public and private sectors. The law was also established to fight child labor but it’s still relevant even today as it regulates the modern workforce. For instance, the law provides a guideline for documenting work hours and how exempt and non-exempt workers are compensated for the services they provide to their employers. According to the FLSA, the following types of employees are considered exempt:
Executive employees; Administrative employees; Professional employees; Employees working outside sales; and Computer-related professionals.
It should however be noted that exempt status cannot be determined by job title alone. The Department of Labor has set the minimum requirements for determining exempt status and it includes: A minimum salary; and Specific job duties.
Employee Classification There are several common types of employee classifications in the labor market, including: 1. Full-Time Employees
Full-time employees typically work for a minimum of eight hours in a work day and their salary is typically fixed–in other words, their salaries are not affected by prevailing conditions. These types of employees are entitled to various benefits provided by their employers, such as paid leave & time off, medical coverage, and 401K. Full-time employees are considered Non-exempt under the FLSA, meaning they’re entitled to overtime pay for overtime work done during a workday, workweek, or work month. However, the FLSA does not define the number of hours one should work to be considered a full-time employee–meaning your employer has the final say in determining the minimum hours for full-time classification.
2. Part-Time Employees These are employees who work less than 30 hours in a work week and are paid at an hourly rate. Such workers can work for different employers, unlike full-time employees, meaning they can gain experience in multiple fields. Part-time workers are usually non-exempt and hence, qualify for the benefits specified under the FLSA. Specifically, these types of employees are entitled to overtime pay. 3. Contract Employees Contract employees are different from full-time and part-time employees because their working engagements are specified under a short-term contract. Having said that, the terms of engagement may vary by contract. The features of a contract employee can include:
The duration of the contract is clear right from the onset; The contact can or may not be renewable; The contactor gets orders from the employer; The contractor’s work schedule is determined by the employer, and more. Contract workers are non-exempt and hence, entitled to the benefits of the FLSA.
4. Independent Contractors These are contract employees who are not included in a company’s payroll. In other words, they’re hired temporarily to complete a particular project and their features include: Not controlled by the employer; Their contracts are short-term; They determine their work schedules; Independent contractors are not employees of the companies they work for at a particular time, meaning they’re considered exempt employees under the FLSA. 5. Temporary Employees Temporary employees are typically to replace or cover full-time employees who are absent for an extended duration of time, for certain reasons, such as maternity or paternity leave, medical leave, and more. California non-exempt employees are entitled to overtime pay otherwise they can bring unpaid overtime claims against their employers for the unpaid overtime dues.
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