Dejban Law
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Misclassification

Misclassification

Helping Employees Who Have Been Misclassified Collect Wages They Deserve

California Labor Code § 515 requires that most exempt workers earn a salary equal to at least two times the minimum wage at full-time employment. As of July 2014, these minimum salary requirements will increase to $37,440, and $41,600, effective January 2016. With these new minimum wage increases, employers are advised to reexamine their classification of exempt workers.

With new state regulations each year and with a new California minimum wage pay law established in 2014, employers often misclassify employees as exempt, intentionally or accidentally, to avoid paying costly overtime wages.

California employees paid salary or hourly may be eligible for overtime pay, whether they are paid weekly, bi-weekly or monthly. Being paid a salary does not automatically make an employee exempt from California overtime pay.

One test to determine eligibility for overtime pay is the “duties test”—assessing the actual work being done rather than only job titles or written job descriptions. An employee must be doing work that is mainly administrative, professional or executive in nature to be exempt from overtime.

  • To be Exempt as an Administrative Employee: an employee must perform non-manual work as his or her primary duty, directly related to management policies, or general business operations, or perform work in educational administration.
  • To be Exempt as a Professional Employee: an employee’s primary duties must consistently involve discretion and judgment, and work which is predominantly intellectual and varied.
  • To Be Exempt as an Executive Employee: an employee must regularly direct the work of two or more other full-time employees, and have management as his/her “primary duty.” An exempt employee must also make over a certain amount of money a year, and must be paid salary. Exempt employees are not eligible for overtime pay, meal and rest period requirements, uniform requirements, and other protections of the Industrial Welfare Commission Orders.

Some employees are either accidentally or purposely misclassified as exempt from overtime pay. Either way, if they have been misclassified as exempt from overtime pay, they still deserve to be paid overtime and they deserve compensation for unpaid overtime.