Misclassification as Exempt Employee

Misclassified as Exempt? California Employees’ Rights to Overtime and Breaks

Introduction: The Critical Difference Between Exempt and Non-Exempt Status

In California, whether you are classified as an “exempt” or “non-exempt” employee is one of the most critical factors determining your rights to overtime pay and legally mandated meal and rest breaks. While employers may classify certain salaried employees as exempt, this status is strictly defined by law and requires meeting specific salary and job duty requirements. Unfortunately, employers sometimes misclassify employees as exempt to avoid paying overtime and providing required breaks, which is illegal and can lead to significant unpaid wages.

At Brightwood Law Group, PC, we are dedicated to ensuring employees are correctly classified and receive all compensation they are legally entitled to. If you believe you have been misclassified as an exempt employee, this page will help you understand your rights and the legal standards that apply.

Understanding Exempt vs. Non-Exempt Status in California

  • Non-Exempt Employees: The vast majority of employees in California are considered non-exempt. This means they are entitled to the full protection of California’s wage and hour laws, including: 
  • Minimum wage for all hours worked.
  • Overtime pay for hours worked beyond daily and weekly limits.
  • Legally mandated meal and rest breaks.
  • Accurate, itemized wage statements.
  • Exempt Employees: Certain employees may be classified as exempt from overtime and meal/rest break requirements only if they meet very specific criteria related to both their salary and their job duties. Job titles alone do not determine exempt status; the actual work performed is what matters.


Consequences of Misclassification for Employees:
If you are misclassified as exempt when you should be non-exempt, you could be losing out on significant compensation, including:

  • Unpaid overtime wages for all extra hours worked.
  • Premium pay for missed meal and rest breaks.
  • Potential minimum wage violations if your salary, when divided by all hours worked (including unpaid overtime), falls below the minimum wage.
  • Related penalties and interest.

“White Collar” Exemptions in California

In California there are certain position that are exempt to certain wage and hour laws. For an employee to qualify for the most common exemptions (often called “white collar” exemptions – Executive, Administrative, and Professional), an employee must meet BOTH a salary basis test AND a duties test.

  • Salary Basis Test: To be exempt, an employee must earn a monthly salary equivalent to at least twice the state minimum wage for full-time employment (40 hours per week). It is important to note that being paid a salary does not automatically make an employee exempt from overtime. Many salaried employees are, in fact, non-exempt if they don’t meet the duties test or the salary threshold.
  • Duties Test: In addition to meeting the salary basis test above, the employee must be primarily engaged in duties that are considered executive, administrative, or professional in nature.  The below is a non-exhaustive list of examples. 
    • Executive Exemption:
      • Management of a department or enterprise, directing the work of at least two employees, authority in hiring or firing, the regular exercise of discretion and independent judgment
    • Administrative Exemption:
      • Office or non-manual work directly related to management policies or general business operations, and the regular exercise of discretion and independent judgment
    • Professional Exemption:
      • Licensed or certified professions (e.g. law, medicine, architects, engineering etc.) or those professional engaged in an artistic professional who regularly exercise of discretion and independent judgment


REMEMBER:
The actual duties you perform daily and the level of independent judgment you exercise are what truly matter under the law NOT your job title.

Common Misconceptions and Signs of Potential Misclassification

Many employees are misclassified due to the complexities of the law, misunderstandings, or intentional efforts by employers to cut costs by not paying full and complete wages. In general, watch out for these common misconceptions and red flags and promptly contact our office to speak to an experienced attorney: 

  • “I’m paid a salary, so I’m exempt.” This is a very common myth. Many salaried employees are entitled to overtime if they don’t meet the strict duties tests.
  • “My job title is ‘Manager’ or ‘Supervisor’.” Your title is irrelevant if your actual day-to-day duties do not primarily involve managerial tasks, directing others, and exercising significant independent judgment.
  • Performing mostly non-exempt work: If you spend the majority of your time performing the same tasks as the non-exempt employees you supposedly supervise, you may be misclassified.
  • Lacking true independent judgment: If you do not exercise discretion or independent judgement or if you primarily follow established procedures without significant discretion, you may not meet the duties test for administrative or professional exemptions.
  • Working long hours without overtime pay: If you are classified as exempt but routinely work more than 8 hours a day or 40 hours a week without overtime compensation, it’s worth examining your classification.
  • Earning less than the minimum salary threshold: If your fixed salary (before bonuses or commissions) does not meet the current minimum required for exemption (twice the state minimum wage for full-time work), you cannot be legally classified as exempt under the white-collar exemptions.

What to Do If You Believe You Are Misclassified as Exempt?

If you suspect your employer has misclassified you as an exempt employee, contact our office and speak to an experienced attorney. We will (1) carefully review your actual job duties; (2) request pertinent documents; and (3) check your pay rate against California’s strict exemption criteria and advise you on your rights and potential claims.

What are my Legal Remedies if I am Misclassification as Exempt?

If you have been misclassified as exempt, you may be entitled to compensation, including: (1) unpaid overtime wages; (2) missed meal and rest break premiums; (3) unpaid minimum wages; (4) interest; (5) waiting time penalties; (6) wage statement penalties; and in some cases, attorney’s fees and costs.

How Brightwood Law Group, PC Can Help with My Misclassification Claims?

Brightwood Law Group, PC has significant experience advocating for employees. In fact, we only represent employees, no employers allowed! Our entire practice is committed to justice, advocacy, and ultimately a fair recovery. We understand the complexities of California’s labor laws and can help you by providing a free consultation to determine if we are able to represent you and pursue legal action.