San Diego Unpaid Overtime Attorneys
We Handle Salary Misclassification & Overtime Lawsuits for all California Employees
Only salaried employees qualifying under the “white-collar” overtime exemptions are exempt from receiving the overtime premium. Executive (managers), administrative, professional, sales, and computer professional employees are exempt from overtime requirements in California, provided they meet certain tests regarding job duties and responsibilities and are compensated on a salary or guaranteed commission basis at not less than stated amounts.
Employers often avoid paying overtime by misclassifying employees in salaried positions “exempt” from overtime pay. These are narrow exceptions to the general rule that all employees are entitled to premium pay for overtime hours, generally either time-and-a-half for hours worked — between 8 and 12 per day or 40 per week — or double time for hours exceeding 12 per day or on the seventh straight day during a workweek.
IT and computer technology workers, loan consultants, inside sales representatives, managers and assistant managers, pharmaceutical representatives and others work long overtime hours but are often misclassified as salaried employees and not provided premium overtime pay. Misclassified workers are entitled to four years restitution of back pay under California law.
To avoid paying overtime, employers must establish that workers fall under one of the following exemptions:
- Executive exemption
- Administrative exemption
- Professional exemption
- Outside sales exemption
- Inside sales exemption
- Computer professional exemption
The executive exemption is commonly used to classify managers and assistant managers as exempt from overtime. It is applicable to employees who have management as their primary duty (more than 50% of their duties), who direct the work of two or more full-time employees, who have the authority to hire and fire or make recommendations regarding decisions affecting the employment status of others, who regularly exercise a high degree of independent judgment in their work, and who receive a guaranteed salary of not less than two times the state minimum wage for full-time employment for each week.
IT specialists, loan officers, and pharmaceutical representatives, among others, are commonly misclassified under the administrative exemption. The administrative exemption applies to employees who perform office or non-manual work which is directly related to the management policies or general business operations of their employer or their employer’s customers.
They must regularly exercise discretion and judgment in their work and perform under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge or execute under only general supervision special assignments and tasks. Employees primarily engaged in producing the employer’s product or service are not properly classified as administrative employees. They must receive a guaranteed salary of not less than two times the state minimum wage for full-time employment for each week.
The professional exemption pertains to employees who:
- Perform work requiring advanced knowledge and education
- Have a license or certification by the State of California in law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting
- Are primarily engaged in work requiring specialized knowledge gained through an advanced course of study, generally beyond a bachelor’s degree
- Work in an artistic field which is original and creative,
- Work as a teacher
- Regularly exercise discretion and judgment
They must receive a salary of not less than two times the state minimum wage for full-time employment.
Outside Sales Exemption
Employees who perform outside sales work are owed overtime if they spend less than 50% of their time engaged in actual outside sales and related activity. Outside sales does not include sales made by mail, telephone, or the Internet, unless such contact is used merely as an adjunct to in-person sales visits with clients.
Thus, any fixed site, whether home or office, used by a salesperson as a headquarters or for telephonic solicitation of sales is considered one of the employer’s places of business, even though the employer is not in any formal sense the owner or tenant of the property and does not constitute time engaged in outside sales. Sales that originate by telephone generally do not qualify as outside sales.
Inside Sales Exemption
Commissioned inside salespersons must earn guaranteed pay of at least one-and-a-half times the minimum wage for all hours worked each week and more than half of their income from bona fide sales commissions to qualify as exempt from overtime pay under California law. Inside sales representatives are entitled to rest and meal periods or premium compensation in lieu thereof.
Computer Professional Exemption
The California Industrial Welfare Commission Wage Orders contain a limited computer professional exemption for hourly computer professionals paid a minimum of $47.48 per hour (adjusted yearly) whose primary duties involve:
- Systems analysis;
- Software engineering;
- Design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;
- and/or the documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems.
The exemption also apples if an employee is highly skilled and is proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering. A job title shall not be determinative of the applicability of this exemption.
The exemption does not apply to an employee if any of the following apply:
- The employee is a trainee or employee in an entry-level position who is learning to become proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering.
- The employee is in a computer-related occupation but has not attained the level of skill and expertise necessary to work independently and without close supervision.
- The employee is engaged in the operation of computers or in the manufacture, repair, or maintenance of computer hardware and related equipment.
- The employee is an engineer, drafter, machinist, or other professional whose work is highly dependent upon or facilitated by the use of computers and computer software programs and who is skilled in computer-aided design software, including CAD/CAM, but who is not in a computer systems analysis or programming occupation.
- The employee is a writer engaged in writing material, including box labels, product descriptions, documentation, promotional material, setup and installation instructions, and other similar written information, either for print or for on screen media or who writes or provides content material intended to be read by customers, subscribers, or visitors to computer-related media.
- The employee is engaged in any activities for the purpose of creating imagery for effects used in the motion picture, television, or theatrical industry.