California workers may lose overtime, meal breaks, and rest breaks when employers wrongly label positions as exempt. This article explains exemption rules, misclassification warning signs, possible damages, and the role of an employment attorney.
By Brad Nakase, Attorney
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According to the laws of California, your employer may not be required to pay you overtime if you work in an executive, professional, or administrative position. Additionally, your employer may not be required to pay you overtime if you work in computer software, commissioned sales, or outside sales. This is due to the fact that these categories are exempt from overtime restrictions under California law.
It should come as no surprise that businesses often misclassify employees as “exempt” to avoid providing overtime, even though the law forbids it. Here, the law is complex. It can be difficult for non-lawyers to determine whether a staff member is exempt or not.
The employee’s job title is not as important as the actual work requirements and circumstances when determining whether an exemption exists. Even when they shouldn’t, many businesses refer to their employees as exempt. This is usually inadvertent. But even a mistake made in good faith does not absolve the employer of their obligation to compensate you for overtime.
You have to put in a lot of overtime. Your employer is aware that they must pay you overtime if you work in excess of eight hours a day or forty hours a week. Your employer gives you a salary and informs you that you aren’t now eligible for overtime with the goal of avoiding overtime.
The majority of workers think that receiving a salary precludes one from being eligible for overtime.
The act of designating non-exempt employees as exempt in an attempt to deny them their rights to overtime, meal breaks, and rest breaks is known as “exempt employee misclassification.”
Your company must still fulfill stringent conditions before it may designate you as an exempt employee. This is regardless of your position or designation.
1. Salary Requirement
You must be paid at least twice the state’s minimum wage by your employer.
Even if you earn more than the mentioned amounts, you are still required to get a salary if your company pays you on an hourly basis. A salary is a set sum that doesn’t change depending on how many hours you work or the caliber of your work.
Computer professionals are an exception to the salary criterion. Computer specialists are exempt even if they are paid on an hourly or a salary basis.
2. Using Independent Judgment & Discretion
This means that you are able to assess potential courses of action and judgments. You balance the advantages and disadvantages of each and have the power to decide on important issues (like corporate policy, big expenditures, etc.) after considering the numerous options.
3. Requirements for Job Duties
Lastly, exempt personnel are required by law to carry out the following tasks:
For the purpose of denying individuals their rights to overtime, meal breaks, and rest breaks, employers typically misclassify exempt employees and give them a salary. They believe they may save money by avoiding paying overtime if they are able to pay a single sum.
Deliberate misclassification of exempt employees is a major infraction of California labor laws and the FLSA. Employers who are found responsible for misclassifying personnel risk severe consequences. These companies typically wind up paying in excess of what they would have if they had just appropriately classified their workers.
Employers who purposefully misclassify their workers do so for both direct and indirect purposes. In addition to the financial incentive, the majority of misclassified employers fail to accurately record the working hours of their employees. Additionally, the employers typically work in sectors where workers must put in more hours.
You continue to be entitled to overtime pay and reimbursement for missed meal & rest breaks, regardless of whether your employer is aware of the law or is deliberately breaking it.
Exempt roles often pay more. But this doesn’t always transfer into a higher hourly wage.
Your actual hourly rate is calculated by dividing your compensation by the overall number of hours performed if you are an exempt employee who works overtime. Your actual hourly rate can drop to less than the rate per hour commensurate with your salary since you aren’t receiving overtime compensation.
On the other hand, if you work overtime and are not exempt, you will be paid 1.5 times your normal hourly rate. Your actual hourly rate actually rises when you average this higher rate with your usual hourly rate.
How can you find out if you were incorrectly classified? There is little or no legal relevance to the label that the parties assign to an employee. What makes this important? Because an employee can only get a salary if their real job responsibilities qualify under a federal and state overtime exemption. Because an exemption is a strong defense to an action for unpaid overtime, the burden of showing the employee’s correct classification rests with the employer.
You can be eligible for significant financial damages if your current or past company misclassified you as a salaried employee.
According to the legislation, non-exempt workers who are employed by the hour are entitled to food and rest breaks. The number of hours worked determines the breaks in the following manner:
Rest Breaks
For every four hours worked, take at least ten minutes off. Most significantly, rest periods should be covered by the employer since they are a component of working hours.
Meal Breaks
Working more than 5 hours a day comes with a meal break entitlement. The break has to be at least thirty minutes. Employees are free to choose whether or not to skip their break for food if they work no more than six hours a day.
Another 30-minute break for food is required for workers who put in ten or more hours a day. Above all, meal breaks while on duty are included in the amount of time spent working.
The Department of Labor (DOL) provides a comprehensive description of the rest and meal break legislation that applies in California.
You may file a lawsuit against your employer if they misclassify you as exempt when you aren’t and deny you the legally required rest and/or eating breaks.
You might be able to reclaim the following if you were incorrectly classified:
Your former or present company may owe you significant interest in addition to unpaid overtime. Wages must have been given at a rate of 10% annually, and interest is computed from the actual date of the paycheck. In addition to the overtime and interest, there are a number of penalties that would probably be applicable and may significantly raise the total sum owed.
You may have extremely significant claims arising from your misclassification when you consider that your attorney’s fees and expenses may be collected as part of any verdict against your present or previous employer.
Taking on misclassification allegations without legal assistance might be frightening. An expert employment attorney will carry out critical tasks.
Credible employment lawyers operate on a contingency fee basis. It means that you don’t pay them anything up front and that they only get compensated if they are successful in getting you money.
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