California Salaried Worker Overtime Exemptions

Many computer professionals mistakenly believe that they are exempt from overtime pay just because they are on a salary.

If they don't fall under the computer professional exemption, salaried computer and hi-tech employees/professionals may be exempt under California law ONLY if they qualify under one of the traditional overtime exemptions:

• Administrative
• Executive
• Professional

In order to qualify under any one of these exemptions, employees must spend more than half their time engaged in exempt work duties, customarily and regularly exercise discretion and independent judgment in performing those duties, and earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment, currently $2,773.33 per month.

Overtime exemptions are narrowly construed against the employer asserting them, and the ultimate burden of supporting the actual application of an exemption rests with the employer.

If you have any question as to whether or not one of these exemptions applies, please contact us.

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Administrative Exemption

The administrative exemption applies to employees who perform work "directly related to management policies or general business operations of the employer."

The employee must spend more than half their time in job duties that involve the following:

(1) regularly and directly assisting a proprietor, or an employee employed in a bona fide executive or administrative capacity, or

(2) performing under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge, or

(3) executing, under only general supervision, special assignments and tasks.

Even if you meet this description, you are NOT exempt if you are a "production employee" -- one who is primarily engaged in producing either the product or the service that a particular company exists to produce. In effect, "production" employees may not be classified as exempt under the administrative exemption because they are not performing work "directly related to management policies or business operations of the company."

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Executive Exemption

In order to qualify under the executive or managerial exemption, the employee must be involved in the management of the business. Therefore, salaried computer and high tech employees are usually more likely to be mis-classified under the administrative and professional exemptions.

A person employed in an executive capacity means any employee who spends more than half their time in job duties that involve the following:

(1) the management of the enterprise in which he/she is employed or of a customarily recognized department or subdivision thereof;

(2) customarily and regularly directing the work of two or more other employees therein; and

(3) having 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.

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Professional Exemption

The professional exemption generally applies to a person who is certified or licensed by the State of California and is primarily engaged in the practice of a profession such as: law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting; or who performs work which requires knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from (i) a general academic education; (ii) an apprenticeship; or (iii) training in the performance of routine mental, annual, or physical processes or an artistic profession.

Guidance from the California Labor Commissioner suggests that in California an advanced degree, above a B.A. or B.S., is necessary to meet the learned profession exemption. Accordingly, it is unlikely that a significant number of employees working in computer-related fields would qualify for the professional exemption.

Related Information and Employment Issues for Computer & Hi-Tech Professionals

• California Computer Professional Exemption
• Hourly Computer Professionals
• Salaried Computer Professionals
• California Salaried Worker Overtime Exemptions
• Federal Computer Professional Exemption
• Wage Violations: Computer Professionals

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