What’s an Exempt Employee?

What does "exempt" mean

06 Mar What’s an Exempt Employee?

What’s an exempt employee? It simply means that an employee is exempt from certain wage and hour laws. We’ve written a few posts about the difference between employees and independent contractors. But there are also two kinds of employees: exempt and non-exempt.

What does it mean for an employee to be exempt?

Both federal and California law have lots of laws governing employment. For example, laws that set a minimum wage or require overtime pay. But some of these laws don’t apply to all employees. For instance, the law doesn’t require overtime pay for some salaried employees. These employees are exempt from the overtime law.

How do I know if I’m exempt?

California law presumes that an employee is non-exempt. Accordingly, the employer bears the burden to show that an employee is exempt. To do so, the employer must show that the employee fits plainly and unmistakably within the exemptions’ terms. It is a mixed question of law and fact, but again, the burden is on the employer. Additionally, California law is more protective than federal law on this issue.

California wage and hour laws address several categories of exempt employees. Employees must satisfy certain criteria to fall within each exemption. All of them use what is called the “primarily engaged in” test. Under this test, your employer may consider you an exempt employee if you’re primarily engaged in work that qualifies for exemption. You’re primarily engaged in exempt work if more than 50% of the work that you do falls within the exemption. So if more than 50% of your work is of the type that qualifies for a specific exemption, your employer can consider you exempt.

Types of exemptions

One of the more common exemptions is the executive, administrative and professional employees’ exemption. To be exempt under this category, you have to be primarily engaged in duties that meet the test of the exemption, which are established by a wage order. Under this rule, you have to customarily and regularly exercise discretion and independent judgment in performing those duties. Also, you have to earn a monthly salary that is equivalent to at least twice the state minimum wage for full time employment.

The idea is this: If you are an employee working at a restaurant, or working in a job that pays you by the hour, and you don’t make more than twice the minimum wage, then you don’t really manage people, and you don’t exercise independent judgments – you basically have a supervisor or manager that tells you what to do – California wage and hour laws should protect you. You should be able to get minimum wage pay and overtime pay, and other protections under the California labor code. There are other exemptions as well.

If you believe that your employer has wrongfully classified you as an exempt employee, contact the Khadder Law Firm today for a free initial consultation.

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