Offices in San Francisco and Marin County

Offices in San Francisco and Marin County

The Myth of Salary

Salaried employees are not necessarily exempt from overtime laws. This myth comes from the requirement of certain overtime exemptions that the employee be paid a salary. That requirement is just one of many — and it is the easiest to meet. The fact remains that there are many people who are paid a salary who are entitled to overtime, and there are many people who are paid hourly who dont get any overtime. Suffice it to say that if someone told you that you are not entitled to overtime just because you are paid a salary, that is just plain wrong. If you are paid a salary, you are still entitled to overtime unless you meet all of the requirements for one of the exemptions. These additional requirements are difficult to meet and many people in simply do not meet them. If you have questions about whether your particular job would be entitled to overtime, you can email me a brief description of the type of work that you do and I can easily take a look at it and get back to you.

MOST COMMON OVERTIME EXEMPTIONS

Overtime laws do not apply to all employees. Certain employees are considered exempt, and are not entitled to overtime pay. Employees who are exempt from overtime laws usually have significant responsibility within a company. You are not exempt simply because your employer gives you a certain title or pays you a salary. You are only exempt 1) if you are paid a salary equal to at least twice the current minimum wage (currently $540 a week before taxes) and 2) fall under an overtime exemption. Exemptions from overtime law generally fall into the three major categories, described below:

1. Exemption for Managerial or Executive Employees

State or federal overtime laws do not generally cover employees who are considered managerial or executive. To be considered a managerial or executive employee, you must:

a) Directly and regularly supervise the work of two or more full-time employees; and

b) Regularly be allowed to make independent decisions without direct supervision about matters that are important to the company (this means that the work you do is related to important company policy or business decisions); and

c) Make recommendations about the hiring and firing of employees, and have enough authority within the company that your recommendations are given serious attention.

2. Exemption for Professional Employees

State or federal overtime laws do not generally cover employees who are considered professional. To be considered a professional employee, you must be licensed or certified in:

a) Law (does not include paralegals)
b) Architecture
c) Medicine (does not include nurses)
d) Optometry
e) Dentistry
f) Engineering
g) Teaching
h) Accounting (includes only certified public accountants.)

You must also spend at least half of your work time performing duties that are typical of your profession. Also, under California state law, you may be considered a professional if you spend at least half of your hours doing work in a field that is commonly considered a learned or artistic profession. For your job to be considered, you typically need a college degree or pursued other paths of intellectual study. Also, your work must be original and creative in character and depend primarily on your own invention, imagination, or talent. Some high-tech and computer industry workers will fall into this category. This exception is very limited, so you should not assume you qualify just because your job involves some creativity.

3. Exemption for Administrative Employees

State or federal overtime laws do not generally cover employees who are considered administrative. To be considered an administrative employee, you must:

a) Spend more than half your time on work that is intellectual; and
b) Regularly make independent decisions without direct supervision about matters that are important to the company (this means that the work you do is related to important company policy or business decisions); and
c) Do work that is outside the production process.

Also, to be considered an administrative employee, you must do at least one of the following:

a) You must regularly and directly assist the owner of the company or another manager or administrator; or
b) You must perform work that requires special training, experience, or knowledge without direct supervision, or with minimal supervision; or
c) You must perform special assignments that require you to make decisions that affect the company with only general supervision.

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