Managers, Executives, Professionals &
Artists
An employee who is employed as an administrator
(manager), executive, professional, or an artist may not receive the
protections of most of the California wage laws. However, employers often
misclassify their employees as “exempt” from the wage laws in order
to avoid providing employees with the benefits of such laws that they are
otherwise entitled to. Determining whether en employee is exempt from the labor
laws may turn on whether the employee customarily and regularly exercised
discretion and independent judgment in performing her duties. 
Executive Exemption
An executive is exempt from the overtime laws. A
person employed in an executive capacity means any employee:
- Whose duties and responsibilities involve the
management of the enterprise in which he or she is employed or of a customarily
recognized department or subdivision thereof; and
- Who customarily and regularly directs the work of
two or more other employees therein; and
- Who has the authority to hire or fire other
employees or whose suggestions and recommendations as to the hiring or firing
and as to the advancement and promotion or any other change of status of other
employees will be given particular weight; and
- Who customarily and regularly exercises discretion
and independent judgment; and
- Who is primarily engaged in duties, which meet the
test of the exemption.
- An executive employee must also earn a monthly
salary equivalent to no less than two times the state minimum wage for
full-time employment. Full-time employment means 40 hours per week as defined
in Labor Code Section 515(c)
Under California law, the term "primarily engaged in"
means that more than one-half of the employee's work time must be spent engaged
in exempt work. This differs substantially from the federal overtime law which
simply requires that the "primary duty" of the employee falls within the exempt
duties. 
Professional and Artistic Exemption
Professionals and Artists are also exempt from the
overtime law protections. A person employed in a professional capacity means
any employee who meets all of the following requirements:
- Who is licensed or certified by the State of
California and is primarily engaged in the practice of one of the following
recognized professions: law, medicine, dentistry, optometry, architecture,
engineering, teaching, or accounting, or
- Who is primarily engaged in an occupation commonly
recognized as a learned or artistic profession. "Learned or artistic
profession" means an employee who is primarily engaged in the performance
of:
- Work requiring knowledge
of an advance type in a field or science or learning customarily acquired by a
prolonged course of specialized intellectual instruction and study, as
distinguished from a general academic education and from an apprenticeship, and
from training in the performance of routine mental, manual, or physical
processes, or work that is an essential part of or necessarily incident to any
of the above work; or
Work that is original and creative in character in
a recognized field of artistic endeavor (as opposed to work which can be
produced by a person endowed with general manual or intellectual ability and
training), and the result of which depends primarily on the invention,
imagination, or talent of the employee or work that is an essential part of or
necessarily incident to any of the above work; and
Whose work is
predominantly intellectual and varied in character (as opposed to routine
mental, manual, mechanical, or physical work) and is of such character that the
output produced or the result accomplished cannot be standardized in relation
to a given period of time.
- Who customarily and regularly exercised discretion
an independent judgment in the performance of duties set forth above.
- Who earns a monthly salary equivalent to no less
than two times the state minimum wage for full-time employment. Full-time
employment means 40 hours per week as defined in
Labor Code Section 515(c).
Regarding the requirement for the exemption to apply
that the employee "customarily and regularly exercises discretion and
independent judgment," this phrase means the comparison and evaluation of
possible courses of conduct and acting or making a decision after the various
possibilities have been considered. The employee must have the authority or
power to make an independent choice, free from immediate direction or
supervision and with respect to matters of significance. For the learned
professions, an advanced academic degree (above the bachelor level) is a
standard prerequisite.
For the artistic professions, work in a "recognized
field of artistic endeavor" includes such fields as music, writing, the
theater, and the plastic and graphic arts. 
Administrative Exemption
A person employed in an administrative capacity means
any employee:
- Whose duties and responsibilities involve
either:
The performance of office or non-manual work directly related to
management policies or general business operations of his or her employer or
his or her employer's customers, or
The performance of functions in the
administration of a school system, or educational establishment or institution,
or of a department or subdivision thereof, in work directly related to the
academic instruction or training carried on therein; and
- Who customarily and regularly exercised discretion
and independent judgment; and
- Who regularly and directly assists a proprietor, or
an employee employed in a bona fide executive or administrative capacity,
or
- Who performs, under only general supervision, work
along specialized or technical lines requiring special training, experience, or
knowledge, or
- Who executes, under only general supervision,
special assignments and tasks, and
- Who is primarily engaged in duties which meet the
test for the exemption.
- An administrative employee must also earn a monthly
salary equivalent to no less than two times the state minimum wage for
full-time employment. Full-time employment means 40 hours per week as defined
in
Labor Code Section 515(c).
Following are examples of employees who might qualify
for the exemption if, and only if, they meet the criteria set forth above:
- Employees who regularly and directly assist a
proprietor or exempt executive or administrator. Included in this category are
those executive assistants and administrative assistants to whom executives or
high-level administrators have delegated part of their discretionary powers.
Generally, such assistants are found in large establishments where the official
assisted has duties of such scope and which require so much attention that the
work of personal scrutiny, correspondence and interviews must be
delegated.
- Employees who perform, only under general
supervision, work along specialized or technical lines requiring special
training, experience or knowledge. Such employees are often described as "staff
employees," or functional, rather than department heads. They include employees
who act as advisory specialists to management, or to the employer's customers.
Typical examples are tax experts, insurance experts, sales research experts,
wage rate analysts, foreign exchange consultants, and statisticians. Such
experts may or may not be exempt, depending on the extent to which they
exercise discretionary powers. Also included in this category would be persons
in charge of a functional department, which may even be a one-person
department, such as credit managers, purchasing agents, buyers, personnel
directors, safety directors, and labor relations directors.
- Employees who perform special assignments under
only general supervision. Often, such employees perform their work away from
the employer's place of business. Typical titles of such persons are buyers,
field representatives, and location managers for motion picture companies. This
category also includes employees whose special assignments are performed
entirely or mostly on the employer's premises, such as customers' brokers in
stock exchange firms and so-called "account executives" in advertising
firms.
Regarding the requirement for the exemption to apply
that the employee "customarily and regularly exercises discretion and
independent judgment," this phrase means the comparison and evaluation of
possible courses of conduct and acting or making a decision after the various
possibilities have been considered. The employee must have the authority or
power to make an independent choice, free from immediate direction or
supervision and with respect to matters of significance. With respect to the
administrative exemption, this phrase has been most frequently misunderstood
and misapplied by employers and employees alike in cases involving the
following:
- Confusion between the exercise of discretion and
independent judgment, and the use of skill in applying techniques, procedures,
or specific standards.
- Misapplication of the phrase to employees making
decisions relating to matters of little consequence.
- Perhaps the most common misapplication is the
application of the exemption to employees engaged in production aspects of the
employer's business as opposed to administrative functions.
Caveat. As with any of the exemptions, job titles
reflecting administrative classifications alone may not reflect actual job
duties and therefore, are of no assistance in determining exempt or nonexempt
status. The fact that an employee may have one of the job titles listed above
is, in and of itself, of no consequence. The actual determination of exempt or
nonexempt status must be based on the nature of the actual work performed by
the individual employee. 
Other Exemptions
The following categories of employees are also exempt
from the overtime laws: hourly computer software professionals, government
employees, outside salespersons, interstate drivers regulated by the federal
government, certain union employees, taxicab drivers, student nurses, some
airline employees, carnival ride operators, commercial fishing boat crew
members, professional actors, motion picture projectionists, TV announcers,
editors and engineers, personal attendants, irrigators, and babysitters for
minor children. Employees whose earnings exceed one and one half times the
minimum wage and more than half their compensation represents commission are
also exempt from overtime protection. 
Independent Contractors
An independent contractor will not ordinarily be
entitled to the same benefits as an employee. Sometimes, employers misclassify
their employees as independent contractors to avoid providing them with
benefits they are entitled to under the labor laws.
Misclassifications
In recent years many employers have reclassified their
workers as "independent contractors" to avoid the costs of workers compensation
and overtime pay associated with employment of workers classified as employees.
There are myriad consequences to employers for misclassification of employees
as independent contractors and managers including penalties from government
agencies, liability for overtime premium, meal period pay, and other remedies
available to employees under the Labor Code and Orders of the Industrial
Welfare Commission, exposure for tort liability for injuries suffered by
employees when workers compensation insurance is not secured, exposure for
unfair business practices, tax liability and penalties and even criminal
liability.
To determine whether a worker an an employee or an
independent contractor, several factors must be considered: acts that show
whether the business has a right to direct and control. An employee is
generally told by his employer (1) when, where, and how to work, (2) what tools
or equipment to use, (3) what workers to hire or to assist with the work, (4)
where to purchase supplies and services, (5) what work must be performed by a
specified individual, and (6) what order or sequence to follow. An employee may
be trained to perform services in a particular manner. Facts that show whether
the business has a right to control the business aspects of the worker’s
job include: (1) The extent to which the worker has unreimbursed expenses; (2)
The extent of the worker’s investment; (3) The extent to which the worker
makes services available to the relevant market; (4) How the business pays the
worker; and (5) The extent to which the worker can realize a profit or loss;
Facts that show the type of relationship include: (1) Written contracts
describing the relationship the parties intended to create; (2) Whether the
worker is provided with employee-type benefits; (3) The permanency of the
relationship; and (4) How integral the services are to the principal
activity.
For a free consultation about California labor law
violations with an experienced employee rights attorney, contact David Spivak:
- Email David@MyWorkMyWages.com
- Call toll free (877) 277-2950
- Visit The Spivak Law Firm, 16530 Ventura Boulevard Suite 312 Encino, CA 91436
- Fax (310) 499-4739
The Spivak Law Firm is a full service employee rights
law firm. David Spivak and his team are proud to represent aggrieved employees
like you in the following matters:
For further information on your rights in the work
place, please visit our other websites:
|
|
|
|
