What are Exempt employees versus nonexempt employees as it relates to California?
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1. What are exempt employees versus nonexempt employees as it relates to California?
California wage and hour law governs employee pay, and governs all wage issues for California employees, such as: adherence to state minimum wage guidelines, the payment of wages, commissions, rest breaks, overtime pay, rest breaks, travel time wage, alternative work week schedules, itemized wage statements, on call pay, requirements for time keeping, and numerous other areas concerning California employee pay. Specifically, in terms of regulating overtime provisions, California employees are classified as either exempt vs. non exempt employee status (United Employees Law Group, n.d).
To be classified as exempt, for example, a California employee is an individual that is not entitled to overtime or "exempt" from receiving overtime pay. When classified as exempt, employees are also "exempt" to the large majority of California wage and hour laws (i.e. rest breaks, meal periods, and so on). Conversely, if classified as "non-exempt", a California employee is entitled to overtime pay as specified as the California's overtime provision. These provisions state that a California "employee shall not be employed more than eight hours in any workday or more than 40 hours in any workweek unless he or she receives one and one-half times his or her regular rate of pay for all hours worked over eight hours in any workday, and over 40 hours in the workweek. Additionally, if an employee worked in excess of 12 hours in any workday, such employee is entitled to double time, or in other words two times their base rate of pay" (United Employees Law Group, n.d).
For example, under California law an employer must pay overtime to all employees unless they fall under an exemption, including professional, administrative, and executive employees, who are exempt from overtime pay. Under California law, a professional, administrative or executive employee is defined as someone who:
1. Is "engaged in work which is primarily intellectual, managerial, or creative," and "which requires exercise of discretion and independent judgment," and
2. Is paid a monthly salary equivalent to at least twice the state minimum wage for full time employees (Eskridge Law, 2000).
To classify California employees and determine if an employee is exempt from overtime pay, California law has two exempt tests: duties and salary that need to be met, or the employee is deemed to be non-exempt and entitled to overtime wages. Under California law, for example, the "duties" test requires that the employee be primarily engaged in exempt duties, including the exercise of independent discretion and judgment, more than 50% of the time. So a job title provided by an employer does not make a position exempt from overtime under the "duties test". On the other hand, the "salary test" states that a California employee is paid no less than two times (twice) the state of ...
California wage and hour law is assessed in terms of employer-employee relations. References are also provided to further validate the findings.