What is the Difference Between an Exempt and Non-Exempt Employee?

What is the Difference Between Exempt & Non-Exempt?

The main difference between an exempt and non-exempt worker is whether or not they qualify for overtime pay. Exempt employees are not eligible for overtime, whereas non-exempt employees do get paid overtime. 

What determines who is classified as exempt or non-exempt comes down to how much money they earn, the nature of their work, and their job duties. We explore more in our blog below. 

Who Is Considered an Exempt Employee?

An exempt employee is type of employee that is exempt from many of California’s pro-worker laws, including the right to a minimum wage, the right to overtime pay, and the right to paid rest periods and unpaid meal breaks. If you’re an exempt employee, your employer can require you to work more than eight hours or more than 5 days a week without paying you a single extra cent or giving you any breaks.

Exempt employees include occupations such as:

  • Independent contractors
  • Salaried employees
  • Certain ride-share employees
  • Outside salespersons

Luckily, these exemptions are narrowly interpreted and often have strict requirements. Many employers incorrectly classify their employees as exempt.

What Do I Do If I Am Improperly Classified as Exempt?

If you are improperly classified as exempt, you are entitled to significant potential damages, including unpaid minimum wages and overtime wages, meal and rest period premium payments, and other civil penalties. Talk to one of our attorneys for help in pursuing your claim. 

How Do I Know If I’m Being Misclassified as an Exempt Employee?

In California, “salaried” employees are often classified as exempt, meaning they are not paid a minimum wage for all hours worked, do not earn overtime pay, and are not guaranteed meal and rest periods. But simply being on a “salary” is not enough to be properly exempt under the law—and employers frequently misclassify employees by failing to comply with the two-part test for the salary exemption: (1) receiving the minimum salary, and (2) performing exempt duties.

What is the Minimum Salary for Exempt Employees?

In all cases, to qualify for the salary exemption, an employee must be paid a “monthly salary equivalent to no less than two times the state minimum wage for full-time employment.” Lab. Code § 515(a). This equates to roughly $54,000-$58,000 per year in 2021 depending on the size of your employer.

In addition to the amount of salary, the salary must be paid as a true salary and not as a disguised hourly worker. That is, an employee must be paid their daily salary amount regardless of the number of hours worked in a given shift, and no deductions can be made for partial absences. Additionally, you must be put to work at least 40 hours per week, so you cannot be a part-time exempt employee.

If you employer is not paying you at least twice the applicable wage, is not paying you the salary regardless of the hours worked per shifts, or is only giving you part-time hours, you cannot be classified as a non-exempt salaried employee and your employer likely owes you back wages.

How Do I Determine Who Qualifies As Exempt or Non-Exempt?

To qualify for the salaried employee exemption, you must also spend more than 50% of your time on “exempt duties” that “customarily and regularly exercise discretion and independent judgment in performing those duties.” Lab. Code § 515(e).

While an exact definition of each type of exempt duty requires a legal analysis of the specifics of your job, a general rule of thumb is that this part of the test basically asks what types of work a salaried exempt employee does and how often he or she does those tasks.

  • Does the employee perform managerial or professional work requiring judgment? If the employee is often engaged in managerial work or other professional work and that work requires them to apply their own judgment and experiences to the work, they are likely to meet and the exemption.
  • Does the employee perform repetitive tasks? Where the employee simply takes direction and engaged in clerical or other rote work, they are likely to fail the exemption.

An employee’s title or job description is not determinative, rather what matters for the exemption is the kind of work actually performed by the employee and the realistic requirements of your job.

Talk to an Experienced Minimum Wage and Employment Lawyer

At King & Siegel LLP, we have helped hundreds of workers hold employers accountable through legal actions. If you have been discriminated against, retaliated against, denied your rightful wages, or wrongfully terminated, our attorneys are here to help.

Need legal help? We provide free, confidential consultations to California workers. You should contact us as soon as possible to make sure your claim is still within the time limits set by law. If you are a victim of wage theft or other violations of the employment laws, contact us today through our website or give us a call at (213) 214-3757 to schedule a free consultation.

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