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Understanding Misclassification: Exempt vs. Non-Exempt Employees

Under the California Labor Code, all employees are required to receive overtime pay when they earn it, as well as proper meal and rest breaks, and a baseline minimum wage for their work. This is true even if you work part-time, although part-time employees will typically receive fewer required breaks and work less overtime.

However, because certain professions can make you legally exempt from wage and hour laws, many employers will try to classify their workers as “exempt” to avoid covering their benefits. If you actually qualify as “non-exempt,” you may be entitled to file a wage and hour claim against your employer, and even receive back-pay for overtime.

Misclassification of Non-Exempt Workers

Employers will often misclassify their workers as “independent contractors,” and claim that there isn’t a full employee relationship between them. Because wage and hour laws can only be applied to full employees, this is one of the easiest ways for an employer to label you as exempt and avoid offering appropriate breaks and other rights. It’s also a violation of the Fair Labor Standards Act, which means you can hold them accountable if they have intentionally misclassified you as an independent contractor.

Here are some of the telltale signs that you are a full employee rather than a contractor:

  • The company can control what you do for your job.
  • You have a written contract or agreement that includes employee benefits.
  • Your working relationship is expected to continue as a key part of business.
  • The company can control payment methods, including reimbursement and equipment.

Exempt vs. Non-Exempt Workers

Once you’ve determined that you are a full employee of the company, you’ll need to assess whether you classify as exempt on another basis. The rules regarding exemptions in California are incredibly complicated, so it’s important to review your case with a seasoned employment law attorney. However, there are some broad categories you should know about, which are classified as “white collar exemptions.”

White collar roles with these primary duties may be classified as exempt under California law:

  • Executive: If a worker manages two or more employees, has responsibilities that are directly related to business management, and continually applies their own discretion to decisions, they could qualify for the executive exemption.
  • Administrative: Do you exercise discretion over administrative matters on a daily basis? Is your core function to do office or non-manual work that helps with business? Then you may qualify for the administrative exemption.
  • Professional: Employees who bring specialized experience to the table – such as lawyers, doctors, or graphic designers – are often classified as exempt. As in the previous two roles, it isn’t enough to just have these core duties: Professional workers must also exercise their own discretion.

All individuals in these exempt roles must also make at least 2 times more than the state minimum wage to qualify. It’s also important for the duties listed above to be your primary job responsibility, meaning that they take up at least 50% or more of your time.

Fighting on the Side of Workers

At Habbas & Associates, our legal team will help you understand the difference between non-exempt and exempt, and fight for appropriate compensation when you need it. Employers in California are held to high standards, in order to ensure the health, happiness, and wellbeing of those in their employ. Whether you’re being denied rest breaks or overtime pay, our skilled attorneys can help you navigate the process of filing a claim.

Call (888) 387-4053 today to learn more about our legal services.

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