Merely because you are paid a salary, rather than by the hour, does not mean that you are not entitled to overtime pay. You may very well be entitled to overtime pay. It depends on whether you are exempt from the overtime pay laws. In fact, some of the most significant class actions have been over the misclassification of employees as exempt, when they were not exempt.

There are several factors that relate to this question. First, if you are paid less than two times the state minimum wage laws for full time employment, you are entitled to overtime pay. Currently (October of 2017), the minimum wage in California is $10.50 per hour. So, if you are paid less than $21 per hour, you are entitled to overtime pay. Essentially, if you get a salary of less than $43,680 per year, you are entitled to overtime pay (when you work more than eight hours in a day, or 40 hours in a week, or seven consecutive days).

Now, if your salary is more than $43,680 per year, you may still be entitled to overtime pay. Just having a larger salary does not mean you are exempt. The amount of your salary is only one test. The second test relates to your job duties. The following are the most common types of exemptions:

Professional Exemption. There are a number of professions that have been deemed in the “professional” class sufficient to be exempt from overtime laws. So, if you meet the salary test and you are licensed or credentialed and working in law, medicine, engineering, architecture, teaching or accounting, you might be exempt. There is much more to this test but it really requires some legal analysis.

Administrative Exemption. Employees who work behind the scenes, spending a majority of their time in the running of the general business, may be exempt from overtime compensation. If you are not involved in the manufacturing, transportation, selling or advertising of your companies goods or services but, instead, are handling the administrative aspects of the business (bookkeeping, computer networking, staffing, etc.) you might be exempt.

Executive Exemption. If you are a supervisor or manager, have hiring and firing authority, or other similar job responsibilities, you might not be entitled to overtime compensation.

This is only a small introduction to the issue of exempt versus non-exempt employee status in California. Each situation is different and requires professional analysis before a solid conclusion can be reached. If you regularly work overtime hours but are not compensated for it and suspect that you might not be “exempt,” feel free to consult with us. We would love to have the opportunity to consider your situation.