ADMINISTRATORS
This page provides general information on the exemption from overtime pay for administrative employees.
Administrative employees are those whose primary duty is related to management policies or general business operations. Types of jobs that are typically administrative in nature are accounting, purchasing, marketing, tax, quality control, human resources, legal and regulatory compliance, and employees acting as advisors or consultants to clients or customers. Only work performed at the level of policy or general operations can qualify as ‘administrative work.
California law requires that most employees in California be paid at least minimum wage for all hours worked and overtime pay at time and one-half the regular rate of pay for all hours worked over 8 hours in a day or 40 hours in a workweek.
However, the IWC Wage Orders provide an exemption from overtime pay for administrative employees who meet certain tests regarding their job duties and who are paid a salary of at least $640 per week, which is equivalent to $2,773.33 per month or $33,280 per year.
Job titles do not determine exempt status. In order for the exemption to apply, an employee’s specific job duties and compensation must meet all the requirements summarized below.
- The employee must be paid at least a salary of $640.00 per week.
- The employee should not have any reduction in salary for variations in quality or quantity of work
- The employee should not have any reduction in salary for Partial day absences.
- The employee’s duties and responsibilities must involve either the performance of office or non-manual work directly related to management policies or general business operations of his employer or his employer’s customers, or
- Only work performed at the level of policy or general operations can qualify as directly related to management policies or general business operations.
- Work that merely carries out the particular, day-to-day operations of the business is production, not administrative, work.
- The employee regularly and directly assists a proprietor, or another employee who is employed in a bona fide executive or administrative capacity (as such terms are defined for purposes of this section), or (b) performs, under only general supervision, work along specialized or technical lines requiring special training, experience, or knowledge, or (c) executes, under only general supervision, special assignments and tasks.
- The employee must customarily and regularly exercises discretion and independent judgment
- he employee is primarily engaged in duties which meet the test for the exemption.
- The term "primarily engaged in" means that more than one-half of the employee's work time must be spent engaged in exempt work.
For more information about Administrators see Opinion Letters from the California Division of Labor Standards Enforcement:
| Letter No. |
Description |
|
1998.10.05 |
(Exemption: Administrative) |
| 2007.10.29 |
|
| 1999.07.26 |
|
|
2002.03.01 |
(Wages: Salary basis test exempt employees) |
| 2002.05.01 |
(Exempt employee: Calculation of pro rata deduction) |
| 2002.04.08 |
(Exempt employee: No reduction in salary for day absent) |
| 2002.03.12 |
(Exempt employee: Reduction of salary in conjunction with reduction of hours in workday or days in workweek) |
If you are an administrative employee, but feel your position has been misclassified to avoid overtime pay, please call our office at (310) 277-2323 or contact us online for a free consultation.
