Overtime pay: which employees are exempt
Overtime pay rules: a worker on “salary” basis might still be entitled to overtime pay As a general rule, employees are non-exempt, and entitled to overtime pay if they work more than eight hours in a
Overtime pay rules: a worker on “salary” basis might still be entitled to overtime pay
As a general rule, employees are non-exempt, and entitled to overtime pay if they work more than eight hours in a day, 40 hours in a week, or more than six consecutive days in a work week. Overtime wages are 1.5 times the hourly wage over eight hours, and two times the hourly wage over 12 hours.
Those that are not entitled to overtime wages include (among others) those with the following exemptions:
- Executive Exemption: For those employed in an executive capacity, and who have duties and responsibilities involving the management of an enterprise.
- Administrative Exemption: Those performing office or non-manual work directly related to management policies or general business operations of the employer or the employer’s customers.
- Professional Exemption: those licensed or certified by the State of California and primarily engaged in the practice of law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting.
- Modified Work Schedule: To be allowed to work a modified schedule (for instance 4 days x 10 hours per day), without overtime, the modification (alternative workweek) must be approved by employees by secret ballot, and the result registered with the state.
Other exemptions from overtime can include family members of an employer, personal attendances, cab drivers, commissioned employees, certain retail employees or employees that are covered by a collective bargaining agreement.
Penalties for failure to pay
Penalties for mis-classification of non-exempt employees (and failure to pay overtime) can include waiting time penalties (up to 30 days’ pay), wage statement violations ($50 for initial pay period and $100 for each subsequent pay period, per employee, up to $4,000), as well as penalties for missed meal break penalties if they were not made available because of the belief the employee was exempt.
Tips for Employers
Assume you must pay overtime unless (a) overtime was not worked, (b) there is alternative work schedule approved by the state, or (c) there is an exemption. Just because an employer pays on a “salary” basis does not mean the worker is exempt. Also, have good and accurate job descriptions that make the employee categories clear. Finally, if a characterization needs to be changed, change it.
Tips for Employees
Confirm you are properly characterized. If you are not, and you work overtime, the Department of Labor Standards Enforcement (Labor Board) can be used to obtain back pay and penalties if the employer is not responsive to the issue.