California Exempt vs. Non-Exempt Employee Labor Laws

Labor laws protect employers by ensuring fair treatment, fair wages, and a reasonable work environment. These laws and protections apply to most employees nationwide, although some workers may be exempt from certain protections.

Labor laws for exempt and non-exempt employees in California are slightly different. Most California employees are non-exempt from protections under the law, while certain classes of employees are considered exempt from some provisions.

Here’s what California employers need to know about labor laws and how Mosey can help you stay on the right side of state compliance.

How Are Employees Protected Under California Law?

California labor law implements certain protections and rights for most employees. These rights pertain to overtime pay, breaks, and wage protection.

Wage protection is the simplest protection. It means that an employee cannot be paid less than minimum wage before or after deductions from their paycheck. The other rights, however, can be more complicated.

Break Requirements

The requirements for breaks are as follows:

Five-Hour Shifts: All employees who work five or more hours in a shift are entitled to one 30-minute meal break. An employee working a six-hour shift would be entitled to a lunch or dinner break, which can be unpaid.
10-Hour Shifts: Employees who work ten or more hours per shift are entitled to two 30-minute unpaid meal periods. They have the right to waive their second meal period and remain clocked in if they utilize their first meal period. Employees must use at least one meal period.
All Shifts: Employees are entitled to one 10-minute break every four hours worked. Thus, an eight-hour shift employee would be entitled to two 10-minute personal breaks while on the clock.

Overtime Pay and Double-Time Pay Requirements

Employees can work no more than 40 hours per week at their regular pay rate. Every hour worked beyond 40 hours must be compensated at one and a half times an employee’s regular rate of pay.

For example, if an employee makes $20 per hour, they legally must be compensated at $30 per hour for every hour after 40.

Overtime can also apply to daily or weekly work. Anything above eight hours in one day is considered overtime, with each additional hour compensated at an overtime rate. Working more than six consecutive days a week is considered overtime, even if the clocked hours don’t exceed 40 hours per week.

Finally, California requires that employees be compensated at a double time rate if they work shifts longer than 12 hours in a single workday or eight or more hours on the seventh consecutive day of work.

What Is an Exempt Employee in California?

An exempt employee in California meets a certain set of criteria that prevents them from coverage under wage and hour laws. Wage and hour laws dictate which types of employees are entitled to a minimum wage, overtime compensation, and legally required breaks.

Employers do not have the authority to independently make decisions regarding minimum wage, overtime pay, and mandatory breaks. All employers must abide by California law for every non-exempt employee they hire. Employers can choose how to compensate exempt employees, if or when to award overtime pay, and how to handle things like lunch breaks.

Adhere to these rules when assigning an employee exempt or non-exempt status. Treating a non-exempt employee as exempt can result in legal issues, such as valid accusations of wage theft or withholding compensation. Always use the law’s definitions for employee classification rather than your company’s internal definitions to avoid serious legal consequences.

What Are the Exempt Professional Categories?

California labor laws outline several specific categories of exempt employees or professionals. These employees are not protected by the wage and hour laws that govern most types of employees in the state.

The categories include:

Administrative employees
Employees with professional licenses
Executive employees
Computer and IT professionals
State or local government employees
Educators at private institutions or schools
Sales representatives outside of a company
Commission based employment

Exemption is generally assessed based on the job’s duties rather than its title. A title may be similar to that of a general worker, but if the actual labor of the role involves regularly performing administrative duties, the employee who works that position may be considered an exempt employee under California law.

The reverse is also true. An employee who mostly fulfills non-exempt work duties but has an administrative job title would be considered non-exempt based on the actual labor they provide.

It is unethical and illegal to misalign job titles with duties performed to change an employee’s exemption status, and doing so can cause serious financial consequences for an employer.

What Are Some Examples of Exempt Employees in California?

Doctors, surgeons, lawyers, IT consultants, administrative assistants, CEOs, and accountants would all be considered exempt employees in the state of California.

Many licensed professionals work for themselves or independently while carrying their own private business insurance. Commission-based salespeople often operate more like independent contractors.

Exempt professional categories partially exist to prevent salaried people in high-level positions from awarding themselves overtime pay or abusing the overtime system. Most people who don’t have the authority to grant themselves overtime or people who aren’t responsible for overseeing their own paychecks are not exempt professionals.

What Is a Non-Exempt Employee in California?

A non-exempt employee in California is any employee who does not fit into an exempt category. The overwhelming majority of Californian workers are considered non-exempt workers or non-exempt professionals. Most people who collect hourly pay and the majority of tipped employees are legally non-exempt employees.

What Are Some Examples of Non-Exempt Employees in California?

The majority of part-time or full-time hourly jobs in California are non-exempt positions. Almost all jobs that don’t require higher education or a special certification are non-exempt. Any position considered a labor position is also non-exempt, even if the position requires a specialized certification.

More examples include:

Most retail staff
Most restaurant workers and servers
Cashiers and attendants
Most hospitality or janitorial positions
General laborers and construction workers
Factory or warehouse workers
Delivery drivers

Keep in mind that these are descriptions of work performed by an employee rather than official job titles. Job titles, as defined by the company, have no bearing on the law’s interpretation of the work an employee actually completes.

How Can Employers Remain Compliant With California Labor Laws?

Two main strategies can help a company remain compliant with California labor law. These approaches go beyond legal compliance and promote an equitable working environment.

Accurate Job Titles

The most important part of maintaining compliance with California labor laws is to evaluate how job titles within your company align with job duties.

You can name a position almost anything you want as long as it accurately represents the job. A good example is the sandwich chain that uses the title “sandwich artist” to describe its food preparation employees. It’s a bit of a stretch, but it accurately describes the position.

Calling someone an administrative assistant when their only responsibility is to assist the administration in cleaning the office would be misleading. Their work is largely janitorial, which would make them a non-exempt employee. Calling them an office concierge would allow you to give the position a more attractive title without muddying the definition.

Role Reevaluation

Next, you can re-evaluate how a role aligns with a position. You may hire an employee for one role and find their strengths more apparent in another. They may eventually assume responsibilities that fall within a different job category.

If you find that an employee’s duties have changed their exempt or non-exempt designation, update their job title and immediately begin handling their compensation and breaks per their new category. Remember, you don’t have to withhold overtime or breaks from an exempt employee, but you must provide overtime and breaks to a non-exempt employee.

Comply With California Labor Law Using Mosey

Employers have a lot to keep track of, with labor law compliance and employee designations being just two of the issues that require their attention. Mosey’s compliance automation dashboard makes it easy for employers to keep track of compliance issues like labor laws.

Schedule a demo with Mosey to learn how we can work in the background to simplify your business. Focus on your people while Mosey handles the technical aspects of building, growing, and expanding your business through compliance.

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