EXEMPTION FOR EXECUTIVE EMPLOYEES
Executive Employees are exempt from many California wage and hour laws.
This exemption applies to:
All executive employees under any IWC Wage Order.
Type of employee:
Managers and Supervisors.
What are they exempt from:
Overtime; Meal Breaks; Rest Breaks.
What is an executive:California law requires that in order for an executive employee to be exempt from overtime, meal breaks, and rest breaks, the employer must prove all of the following elements:
- “Primary duty” means that the employee must spend more than 50% of his or her time per week carrying out exempt duties.
- Management of the business or one its departments does not apply to individuals who manage a mere collection of employees assigned from time to time to a specific job or series of jobs. Rather, it means that the employee must manage a unit with permanent status and function.
- Examples of exempt duties: interviewing, selecting, and training of employees; setting and adjusting rates of pay and hours of work; directing the work of employees; maintaining production or sales records for use in supervision or control; appraising employees’ productivity and efficiency for the purpose of recommending promotions or other changes in status; handling employee complaints and grievances; disciplining employees; planning the work; determining the techniques to be used; apportioning the work among the employees; determining the type of materials, supplies, machinery, equipment or tools to be used or merchandise to be bought, stocked and sold; controlling the flow and distribution of materials or merchandise and supplies; providing for the safety and security of the employees or the property; planning and controlling the budget; and monitoring or implementing legal compliance measures.
- Examples of non-exempt duties: cashiering; cleaning; stocking; inventory; keeping basic records of working time, as performed by a timekeeper; preparing payroll.
- If a store manager spends more than 50% of his weekly time carrying out duties that his subordinates do, such as, cashiering, cleaning, inventory, the executive exemption will not apply.
- This can be two full time or one (1) full time and two part time employees.
- The recommendations must pertain to employees whom the executive customarily and regularly directs. It does not include occasional suggestions. An employee’s recommendations may still be deemed to have “particular weight” even if a higher level manager’s recommendation has more importance and even if the employee does not have authority to make the ultimate decision as to the employee’s change in status.
- The executive must spend more than 50% of his or her time carrying out duties that require discretion and independent judgment.
- Discretion and Independent Judgment means that the employee must be able to compare and evaluate possible courses of conduct and then make a decision or make a recommendation after those various possibilities have been considered. The term “matters of significance” refers to the level of importance or consequence of the work performed.
- The exercise of discretion and independent judgment does not include clerical or secretarial work, recording data, or performing other mechanical, repetitive, recurrent or routine work. If the duties and responsibilities of the employee is based on his or her application of well established techniques, standards or procedures, the employee is not exercising discretion and independent judgment.
- Courts look at the following factors in deciding whether the employee exercises discretion and independent judgment with respect to matters of significance:
- whether the employee has authority to formulate, affect, interpret, or implement management policies or operating practices;
- whether the employee carries out major assignments in conducting the operations of the business;
- whether the employee performs work that affects business operations to a substantial degree, even if the employee’s assignments are related to operation of a particular segment of the business;
- whether the employee has authority to commit the employer in matters that have significant financial impact
- whether the employee has authority to waive or deviate from established policies and procedures without prior approval;
- whether the employee has authority to negotiate and bind the company on significant matters;
- whether the employee provides consultation or expert advice to management;
- whether the employee is involved in planning long- or short-term business objectives;
- whether the employee investigates and resolves matters of significance on behalf of management; and
- whether the employee represents the company in handling complaints, arbitrating disputes or resolving grievances.
DLSE Opinion. Letter No.
Exemption: Executive, “customarily and regularly”
Exemption: Executive, remuneration test
Exemption: Executive, Applicability of Federal caselaw
Exemptions: Salary basis test for administrative, executive, and professional employees
Wages: Salary basis test exempt employees
Wages: Salary requirement, disciplinary deductions from exempt’s salary
Exempt Employees: Deductions for Partial and Full Day Absences
Exempt Employee: Reduction of salary if the employee is absent from work
Exempt Employee: Reduction of salary if the employee’s hours or number of days worked is reduced.
SPEAK TO A LOS ANGELES UNPAID WAGES LAWYER
The Law Offices of Morris Nazarian provides representation to employees seeking the payment of overtime wages, minimum wages, missed meal and rest breaks, vacation wages, deductions from wages, severance pay, misclassification, independent contractor cases and other unpaid wages or commissions. We also handle harassment and discrimination claims.
If you believe you have been misclassified as an exempt employee, contact a Los Angeles unpaid wages attorney to schedule a free consultation. Please contact Los Angeles misclassification attorney Morris Nazarian by calling (310) 284-7333 to make an appointment for a free initial consultation or please fill out the Employment Law Case Evaluation Form [link: case evaluation form] and Los Angeles employment lawyer Morris Nazarian will call or email you as soon as possible.
If the violation is company-wide, you and your co-workers may be entitled to bring a class action lawsuit against the employer.