You deserve timely payment of all wages and commissions and California law requires it.
Even if your employer pays you a salary, says you are exempt or are an independent contractor, you may be eligible for overtime pay. If you suspect you are owed unpaid wages, we are here to help. You should request an attorney evaluation if your employer wrongfully refuses to pay you overtime compensation, refuses to pay you for all hours worked, or withholds sales commissions.
The San Francisco unpaid wage attorneys at McCormack & Erlich have over two decades of experience helping individuals from many different backgrounds recover unpaid wages and are here to assist you in recovering what you are owed.
Employees working in some high-paying, professional jobs like sales or information technology may be entitled to overtime pay.
Just because your employer says you are exempt from overtime and pays you a salary does not mean you are not entitled to overtime pay. Many employees mistakenly believe they are exempt, but are actually entitled to a significant amount of unpaid overtime compensation.
Non-exempt workers and overtime rates
California overtime laws
In California, a typical non-exempt employee must receive 1.5 times his or her regular rate of pay for all hours worked over eight hours in any workday or for hours worked over 40 in one workweek. He or she must also receive 1.5 times pay for the first eight hours worked on the seventh consecutive day of work in any workweek.
The employee must be paid double the employee's regular rate of pay for all hours worked in excess of 12 hours in any workday, and for all hours worked in excess of eight on the seventh consecutive day of work in a workweek.
What if my employer says I am exempt?
There are number of exemptions to the overtime law. An exemption means that the law does not apply to a particular classification of employees. California overtime law separates employees into two groups: exempt and non-exempt. Only non-exempt employees are entitled to overtime pay, meal breaks, paid rest breaks, and minimum wage.
But just because your employer says you're exempt and pays you a salary does not mean you are actually exempt. Many employees mistakenly believe they are exempt, but are actually entitled to a significant amount of unpaid compensation.
OVERTIME LAWS AND EXEMPTIONS
While exemption lines can be blurry, some common classifications include:
- Management ("Executive" Exemption)
- High-level individual contributors ("Administrative" Exemption)
- People with advanced degrees, actors and artists ("Professional" Exemption)
However, it's not always clear who falls into these exemptions. Wage law is a such a complex mixture of state laws, federal laws, government agency regulations, and court opinions, that you may need an attorney’s help to determine if you fall under a particular exemption.
4 examples of incorrect exemptions:
We can evaluate your position and actual duties to determine if you are owed overtime, breaks, and other wages.
Executive in Name Only
A "store manager" or "assistant store managers" who supervises a few employees, and is paid a fixed salary, but spends more than half her time stocking shelves and helping customers, is likely not exempt and should be paid overtime. A factory floor 'team lead' who tells people what to do, but doesn't have any real influence over hiring and firing is also not likely exempt.
A highly-paid salesperson, who spends more than half his time inside the office, and earns less than half his income from commission, is likely owed overtime compensation in California. An inside salesperson who receives over half her income from commissions but mostly sells to businesses, and not consumers, may also be due overtime.
An I.T. person who earns a high salary, but spends most of her time doing tech support is probably not exempt. I.T. people outside of tech support may not be exempt either, depending on their salary and exact duties.
Highly-Paid Administrative Staff
Administrative Staff who are Closely Directed: The Administrative exemption usually applies to non-managers who perform independent, strategic work. However, an executive assistant earning $90,000 per year is likely not exempt.
What if I am told I am an independent contractor?
California’s employers are some of the largest abusers of the independent contractor designation. Independent contractors lose many of the benefits regular employees have. Random audits have shown that up to 33% of employees are misclassified and millions of dollars are lost in tax revenue.
If you have been misclassified, you may be entitled to unpaid overtime, meal and rest breaks, and various additional penalties.
Independent contractor misclassification is becoming more prevalent
California’s employers are some of the largest abusers of independent contractor status
The primary factor in determining whether an individual is an employee, as opposed to an independent contractor, is the employer's "right to control" your work. The more you seem like any other employee, and the less control you have, the more likely it is you have been misclassified as an independent contractor. Unfortunately there is no simple black-and-white test to determine what kind of control your employer must exercise, for you to be considered an employee. The employment attorneys at McCormack & Erlich can assess whether you have been misclassified as an independent contractor.
In general the most important factors are:
1. Whether you have to work at a specific time and place
2. Whether you receive training; how closely you are directed
3. Whether your employment ends at a certain date or is ongoing
4. Whether you are paid a salary or paid by the job.
Courts will balance these factors to determine whether you are an employee or independent contractor.
Any payment indexed to sales you make is a sales commission, even if your employer calls it a bonus or something else. Commission plans must state in writing the conditions for earning the commission and the calculation formula. If you complete a sale and meet all requirements of your commission plan, then you are owed that commission. The employer cannot change the plan after the fact or later claim that the commission plan is discretionary. Even if you quit or are terminated before the payout date, you may be owed some or all of your commissions for sales that you made. Furthermore, as discussed above, some inside sales persons are owed overtime, and in that case, the commission is factored into your overtime rate.
Misclassification of a salesperson and unpaid commissions
Our client was misclassified as exempt when he was hired as a salesperson. After he was terminated from the position, his employer refused to pay the commissions and overtime he was owed.
Once he reached out to McCormack & Erlich for help, we realized that he had been improperly misclassified as exempt when in fact he was a nonexempt employee. We filed a lawsuit on his behalf and were able to recover more than he originally thought he was owed.
State minimum wage
By 2024, California minimum wage will be indexed to inflation.
In California, the minimum wage rate is $11/hour if the company has over 25 employees, or $10.50/hour for smaller companies. In San Francisco, the minimum wage is $14/hour (increased to $15/hour on July 1, 2018); while in San Jose, the minimum wage is $12/hour.
The California minimum wage will continue to rise yearly until 2024, when it will be indexed to inflation. We understand it can be difficult to understand all of the rules surrounding overtime pay and minimum wage. The experienced wage attorneys at McCormack & Erlich are available to answer your questions or concerns. Please contact us at (888) 465-5110 or (415) 296-8420 (local), or fill out the form below for a free consultation.
Call for a free case evaluation
We understand it can be difficult to understand all of the rules surrounding overtime pay, minimum wage, and laws pertaining to unpaid wages. The experienced unpaid wage attorneys at McCormack & Erlich are available to answer your questions or concerns. Please call us for a free consultation.