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Q. How do I know if I have been properly classified as an exempt employee who is not entitled to overtime pay?

A. In California, exempt employees are not entitled to various forms of compensation, like overtime pay. There are various specified exemptions under California law. Depending on your profession, whether you meet the test for exemption may be a complicated determination.

Common exemptions include “white collar” exemptions, which are the executive, administrative and professional exemptions. Generally, for these exemptions, an employee is exempt if she meets the “salary” and “duties” test: (i) She must earn a fixed salary of at least twice the state’s minimum wage; and (ii) She must also customarily and regularly exercise “discretion and independent judgment” in her work more than half of the work time.

“Discretion and independent judgment” means the employee “has the authority or power to make an independent choice, free from immediate direction or supervision and with respect to matters of significance.”

The executive exemption generally applies to management employees who supervise two or more full-time employees on a regular basis. These employees must also either have the authority to hire or fire or have their recommendations in that regard be given particular weight.

The administrative exemption generally applies to employees who perform office or non-manual work that is directly related to the management policies or general business operations of the employer or the employer’s customers.

The professional exemption generally applies to employees licensed by the state who are primarily engaged in the practice of law, medicine, dentistry, optometry, architecture, engineering, teaching or accounting. Notably, pharmacists and most nurses are expressly excluded from this exemption.

For the computer professional exemption, the employee must earn at least $41.85 per hour or a salary of not less than $87,185.14 where the employee is paid at least once a month and not less than $7,265.43. Guaranteed incentive compensation that is paid less frequently than once a month cannot be counted in meeting these minimums. The minimums increase each year based on cost of living. An IT professional who does not receive this compensation may still qualify as exempt, however, under the executive or administrative exemption if she meets the requirements of that exempt classification.

Bobby Shukla practices employment law in San Francisco. (415) 986-1338.

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