What is misclassification?
Employers in California often misclassify employees as exempt in order to deny them overtime pay and proper meal and rest breaks. Popular to contrary belief, simply being paid an annual salary instead of an hourly rate does not make you exempt. Likewise, making more than $100,000 a year does not automatically make you exempt.
Instead, a case by case analysis of your job duties must be conducted in order to determine whether you qualify under one of the following exempt categories: administrative, executive, professional, or computer professional.
How do I determine whether I fall within one of the exempt categories?
The following definitions are reviewed in order to determine whether you are exempt:
A person employed in an executive capacity means any employee:
(a) Whose duties and responsibilities involve the management of the enterprise in which he/she is employed or of a customarily recognized department or subdivision thereof; and
(b) Who customarily and regularly directs the work of two or more other employees therein; and
(c) Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight; and
(d) Who customarily and regularly exercises discretion and independent judgment; and
(e) Who is primarily engaged in duties which meet the test of the exemption.
Such an employee must also earn a monthly salary equivalent to no less than two (2) times the state minimum wage for full-time employment ($33,280 a year for 2013).
A person employed in an administrative capacity means any employee:
(a) Whose duties and responsibilities involve either:
(i) The performance of office or non-manual work directly related to management policies or general business operations of his/her employer or his/her employer's customers; or
(ii) The performance of functions in the administration of a school system, or educational establishment or institution, or of a department or subdivision thereof, in work directly related to the academic instruction or training carried on therein; and
(b) Who customarily and regularly exercises discretion and independent judgment; and
(c) Who regularly and directly assists a proprietor, or an employee employed in a bona fide executive or administrative capacity; or
(d) Who performs under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or
(e) Who executes under only general supervision special assignments and tasks; and
(f) Who is primarily engaged in duties that meet the test of the exemption.
Such employee must also earn a monthly salary equivalent to no less than two (2) times the state minimum wage for full-time employment. ($33,280 a year for 2013).
A person employed in a professional capacity means any employee who meets all of the following requirements:
(a) Who is licensed or certified by the State of California and is primarily engaged in the practice of one of the following recognized professions: law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting; or
(b) Who is primarily engaged in an occupation commonly recognized as a learned or artistic profession. For the purposes of this subsection, "learned or artistic profession"Â means an employee who is primarily engaged in the performance of:
(i) Work requiring knowledge of an advanced type in a field or science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from a general academic education and from an apprenticeship,and from training in the performance of routine mental, manual, or physical processes, or work that is an essential part of or necessarily incident to any of the above work; or
(ii) Work that is original and creative in character in a recognized field of artistic endeavor (as opposed to work which can be produced by a person endowed with general manual or intellectual ability and training), and the result of which depends primarily on the invention, imagination, or talent of the employee or work that is an essential part of or necessarily incident to any of the above work; and
(iii) Whose work is predominantly intellectual and varied in character (as opposed to routine mental, manual, mechanical,or physical work) and is of such character that the output produced or the result accomplished cannot be standardized in relation to a given period of time.
(c) Who customarily and regularly exercises discretion and independent judgment in the performance of duties set forth in subparagraphs (a) and (b).
(d) Who earns a monthly salary equivalent to no less than two (2) times the state minimum wage for full-time employment. ($33,280 for 2013).
An employee in the computer software field who is paid on an hourly basis shall be exempt, if all of the following apply:
(I) The employee is primarily engaged in work that is intellectual or creative and that requires the exercise of discretion and independent judgment.
(ii) The employee is primarily engaged in duties that consist of one or more of the following: The application of systems analysis techniques and procedures, including consulting with users, to determine hardware,software, or system functional specifications. -The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs,including prototypes, based on and related to user or system design specifications. -The documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems.
(iii) The employee is highly skilled and is proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering. A job title shall not be determinative of the applicability of this exemption.
(iv) The employee's annual salary is not less than $83,132.93 annually (required salary for 2013 - the requirement changes annually and will increase in future years).
How can an attorney help you?
Determining exempt status is a complicated process requiring an in depth analysis of an employee s job duties. It is not as simple as determining whether you are paid over $100,000 or are paid on a salary basis. An experienced employment attorney can analyze your daily job duties to determine whether you have been misclassified. We are experienced in misclassification issues, having litigating several such claims before the Labor Commissioner and in court. We will fight to obtain the maximum amount of wages and penalties possible.
Remember: no recovery, no fees. We only get paid if we obtain a positive recovery in your case.