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What is an Exempt Employee in California?

Published on June 6th, 2023

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As a recruiter or hiring manager, it's important to understand the difference between exempt and non-exempt employees in California. The state has its own set of laws regarding who qualifies for each designation, and failure to follow these regulations can result in serious legal consequences for employers. In this blog post, we'll discuss what it means to be an exempt employee in California and some of the key regulations you need to be aware of.

What is an Exempt Employee in California?

In California, exempt employees are those who are exempt from the state's laws regarding overtime pay. This means that these employees do not receive additional pay for working more than eight hours in a day or forty hours in a week. Exempt employees are typically salaried employees who are paid a fixed amount each pay period regardless of the number of hours they work.

There are several categories of exempt employees in California, including executive, administrative, and professional employees. Each of these categories has its own set of criteria that an employee must meet in order to qualify as exempt. For example, executive employees must primarily manage the business and direct the work of at least two other employees to be considered exempt.

Rules for Exempt Employees in California

While exempt employees in California are exempt from overtime pay, there are still rules that employers must follow. For example, employers must still provide meal and rest breaks to exempt employees, and these employees must be paid for any unused vacation time if they are terminated.

Additionally, exempt employees must meet certain minimum salary requirements in order to qualify for exempt status. In California, the minimum salary for exempt employees is $58,240 per year for employers with 26 or more employees, or $54,080 per year for employers with 25 or fewer employees.

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Misclassification of Exempt Employees

Misclassifying employees as exempt can result in serious legal consequences for employers. If an employee is misclassified as exempt, they may be entitled to back pay for any overtime they should have been paid, as well as penalties and interest. In some cases, employers may also face fines or sanctions for failing to comply with California's labor laws.

It's important for recruiters and hiring managers to understand the criteria for exempt employees and to carefully review job descriptions and duties to ensure that employees are classified correctly. If you're unsure whether an employee should be classified as exempt or non-exempt, it's best to consult with an experienced employment law attorney.

Protecting Your Business

As a business owner or hiring manager, it's essential to protect your business by understanding the legal requirements for exempt employees in California. Ensuring that your employees are properly classified and that your payroll and time tracking systems are accurate can help you avoid costly legal disputes and protect your business from liability.

How Many Hours can a Salaried Exempt Employee be Forced to Work in California

In California, salaried exempt employees must be paid at least two times the minimum wage, which means that the minimum salary must be at least $49,920 per annum for an employee to be considered exempt. However, this doesn't necessarily limit the working hours of salaried exempt employees. According to federal law, salaried exempt employees do not have any legal limit on the number of hours they can work per week, and the same applies to California.

However, employers have a legal responsibility to comply with health and safety regulations. So if salaried exempt employees are made to work long hours without guaranteeing their health and safety, then employers may face legal consequences. Employers must provide safe and healthy work environments and avoid creating an "unreasonably dangerous" work environment.

California law also guarantees one day of rest per seven-day workweek. Employers are generally prohibited from making an employee work more than six days each week, except in certain circumstances, such as in cases of emergency or where the nature of the work requires continuous operations. However, employers should note that it is still a liability for them to provide sufficient rest days to employees even if they waive their right to rest days voluntarily.

Even though there isn't a legal limit on the number of hours salaried exempt employees can work, an employer can override salaried exempt status and give an hourly rate, if specific conditions are fulfilled. For instance, if a salaried exempt employee doesn't meet the work requirements, an employer can legally revoke their status and reclassify the employee as hourly, which means that they will be eligible for overtime pay.

Lastly, employers are legally bound to keep and maintain records of hours worked by salaried exempt employees for three years, according to California laws. Employees can request those records, and thus, it is crucial for employers to have an accurate and organized recordkeeping system.

EasySource to Find the Top Talent

EasySource revolutionizes the process of recruitment for exempt employees by introducing the world's first fully automated talent sourcing tool. This innovative platform streamlines a recruiter's search by effortlessly creating a strong talent pipeline with just a few clicks. By leveraging AI-powered filters, including location, skills, education, experience, and US work authorization, EasySource simplifies the task of finding relevant candidates like never before.
 

In addition to its comprehensive features, EasySource incorporates ChatGPT and Generative AI, empowering recruiters to send highly personalized messages to candidates across various platforms, all automated. This integration enhances a recruiter's LinkedIn search capabilities, enabling them to discover and engage with potential exempt candidates without the tedious process of sifting through countless resumes. With EasySource, identifying exceptional talent becomes a breeze for recruiters.

Conclusion

In conclusion, understanding what it means to be an exempt employee in California is essential for recruiters, hiring managers and business owners. While exempt employees are exempt from overtime pay in California, it's important to follow the state's regulations regarding minimum salary requirements, rest and meal breaks, and unused vacation time. Failure to comply with these regulations can result in serious legal consequences for employers. Take steps to protect your business by carefully reviewing job descriptions and consulting with an experienced employment law attorney if you are unsure about employee classification.

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Authors

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Radhika Sarraf

Radhika Sarraf is a content specialist and a woman of many passions who currently works at HireQuotient, a leading recruitment SaaS company. She is a versatile writer with experience in creating compelling articles, blogs, social media posts, and marketing collaterals.

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