by Catherine M. Corfee, Esq.

The answer to who is entitled to overtime pay is: It depends. The federal and California laws governing overtime entitlement are confusing and involve a myriad of factors that must be taken into account by the courts.

Under Federal standards, overtime pay is any hour worked over forty (40) hours in a work week. In California, overtime pay is any hour worked over eight (8) hours in a workday. Overtime pay is 1 ½ times the employee’s hourly wage rate. For example, an employee who is paid $20 an hour, would be entitled to earn $30 an hour in overtime pay.

Unpaid overtime lawsuits are extremely high in California due to the confusion of how to properly classify an employee as exempt or non-exempt. Employers should generally work with experienced employment law attorneys when classifying employees. Even then, there is no guarantee that the classification is proper. At our firm, we typically research a California or Federal case that may have similar job duties and/or pay to better assess this difficult issue.

Merely labeling a worker as “salaried” or “hourly” and/or having an agreement with the worker for such will not govern.  The courts examine the actual duties performed by the worker.

There are some job positions that are not entitled to overtime pay, and the work is not measured by time. For example, there are administrative, executive, and professional exemptions. Some refer to these jobs as “white collar” or non-manual work. 

An administrative employee who is not entitled to overpay generally has duties and responsibilities that involve: (1) the performance of office or non-manual work directly related to management policies or general business operations of his/her employer or his employer’s customers; (2) customarily and regularly exercises discretion and independent judgment; (3) performs under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge; and (4) is primarily engaged in duties that meet the test of the exemption.

An executive employee is one who meets the salary test, i.e., is paid a monthly salary that is at least twice the state minimum wage for full-time employment. The work generally includes managing an enterprise or subdivision, supervising the work of two or more other employees, and making decisions and/or recommendations regarding hiring, firing, promotions, and disciplining.  These employees use their discretion and independent judgment in their work and have minimal oversight.

A professional employee generally includes attorneys, architects, teachers, registered nurses, accountants and so forth. Individuals in these positions are paid a salary.

An outside salesperson may also be exempt from overtime pay. An outside salesperson must spend more than half of their working time away from their employer’s place of business, have limited training, and decides the means and manner of how to achieve the company’s sales quota or results. If an outside salesperson is trained, performs standardized work, and has little decisions making authority, then some courts may find that the person is entitled to overtime pay despite the “outside sales” classification. California tends to readily find that a person is an employee entitled to overtime as opposed to not. This is because California has a strong public policy protecting employee rights.

Entitlement to Overtime Pay. A non-exempt employee is one who is working in the company to produce goods and/or services. This employee does not have independent discretion and judgment in making company policy decisions. Rather, the employee is paid hourly and is performing manual work. This type of employee is supervised and generally has been trained to perform the company’s work.

It is very difficult to classify employees given the numerous job positions available. Corfee Stone can provide advice and assistance in this regard. Call Catherine M. Corfee at 916-487-5441.

*This blog/article is not intended to provide any express or implied legal advice. One must seek advice from an employment attorney.