In addition to the three common requirements that an Executive, Administrative, or Professional Employee must have, each of these three “white-collar” classifications have their own specific work or duties the employee must perform the majority of the time to be an exempt employee.
California Wage and Hour Laws: The Executive Employee Exemption
To be exempt as an Executive Employee:
- The employee’s duties must involve actual management of an enterprise or department of a business;
- The employee directs the work of two or more employees;
- The employee can hire or fire other employees, or make recommendations on hiring, firing or promotion of other employees.
As you can see, the Executive Employee is primarily directing others, not doing the work. This person is not supervising others and doing their work, too.
California Wage and Hour Laws: The Administrative Employee Exemption
This exemption applies to people who assist or administrate the business affairs of the employer. An administrative employee must work directly with an exempt employee or under only general supervision, and administrative work cannot involve making the products or performing services that the employer sells or markets.
In addition, to be exempt as an Administrative Employee:
- The employee’s duties and responsibilities require office or non-manual work directly related to management policies or general business operations of the employer or employer’s customers; and
- The employee does one of the following:
- Regularly and directly assists the business’ proprietor or another exempt employee,
- Performs under only general supervision,
- Works along specialized or technical lines requiring special training or knowledge, or who executes special assignments and tasks under only general supervision; and
“Directly related to management policies or general business operations” means servicing the business, not doing the work the business gets paid to do. For example, advising the management, planning, negotiating, representing the company, purchasing, and business research and control meet the Administrative Employee exemption. Additionally, administrative work must affect the business operations to a substantial degree. This includes the formulation of management policies or the responsibility to execute it.
On the other hand, making sales, producing goods, or performing the services that the employer sells or markets is not administrative work. One might be surprised how often employees believe they fit within the Administrative Exemption just because they work at a desk and predominately use a telephone and computer. If your tasks are routine or is a service for which the business gets paid you probably do not fall within the Administrative Employee exemption.
California Wage and Hour Laws: The Professional or Learned Artistic Exemption
The Professional or “Learned or Artistic” Exemption applies to employees who have a license to practice a profession. A doctor or lawyer would fit in this category. However, registered nurses, pharmacists, paralegals, and most school teachers are non-exempt under these rules.
Like the other exempt classifications, in addition to the three requirements that apply to the “white-collar” exemptions, to qualify as exempt under the Professional or “Learned or Artistic” Exemption, the employer must prove that the employee is either:
- Licensed or certified by the State of California and is primarily engaged in the practice of law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting; or
- Spends over half their work time engaged in an occupation commonly recognized as a learned or artistic profession.
“Learned or artistic” work can be work that requires an advanced knowledge in science or learning as a result of prolonged learning and study. This work also is creative in character in a recognized field of artistic endeavor and which is predominantly intellectual and varied in character (as opposed to routine mental, manual, mechanical, or physical work).
There are two other exempt classifications that need to be mentioned.
California Wage and Hour Laws: The Computer Programmers Exemption
The Computer Programmers Exemption is limited to computer programmers and computer systems analysts. Specifically, this exemption applies to people who spend over half their work time involved in:
- The application of systems analysis techniques and procedures, to determine hardware, software, or system functional specifications;
- The design, development, testing, or modification of computer systems or programs based on user or system design specifications; and
- The testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems.
The Computer Programmer, as of January 2014, must be paid a salary of at least $7,010.88 per month, which is $84,130.56 annually.
However, this exemption is inapplicable to many different types of computer employees, such as trainees, entry-level positions, or people who repair or maintain computer hardware.
California Wage and Hour Laws: The Outside Salesperson Exemption
This exemption focuses on the employee’s duties and the place where these duties are performed. Under California law, an exempt outside salesperson is someone who regularly spends over half their work time engaged in sales away from the employer’s place of business. A traveling salesperson, if you will.
The federal law is similar except that it requires that exempt outside salespeople cannot spend over 20 percent of their work time engaged in the work of other non-exempt employees. What this means is that if an employee spends significant time doing other duties other than being away from the business selling, then that employee’s job merits significant scrutiny to determine if that particular outside sales position is exempt.
If you feel that you have be designated as an exempt employee to avoid being paid overtime and to deny you other benefits and protections granted to nonexempt or hourly employees, you need to talk to an experienced employment attorney. Many employment law claims have a short statute of limitations, which means that you are not entitled to a recovery if you wait too long. The longer you wait the more likely it is you will not be compensated or the amount you are truly owed will be reduced.
The only way to know for sure is to contact us. Initial consultations and evaluations for employment related violations are confidential and free, so there is no cost to you to find out if you have a valid concern and are entitled to compensation.