In California, the labor laws require employers to follow certain basic rules aimed to protect employees, such as paying overtime and minimum wages and providing rest breaks, unless an employee is deemed “exempt” from such legal protections. Employers often misclassify employees as exempt to avoid paying them overtime wages or to avoid complying with other labor law requirements. But an employee can only be properly deemed exempt if: (1) the employee receives a minimum salary of at least twice the minimum wage; (2) the employee’s job duties involve the use of discretion and independent judgment; and (3) the employee’s primary duties (i.e., over 50% of employee’s work time) are administrative, executive, or professional. See Cal. Lab. Code § 515(a). In addition, there are certain other types of jobs that can also be properly considered exempt from some laws, including commissioned employees, outside salespersons, computer software professionals, doctors, truck drivers, and union employees. But employers often misapply these exemptions and as a result fail to pay significant amounts of earned overtime wages.
If an employer misclassifies employee as exempt, they can sue for unpaid overtime and other damages and penalties under various Labor Code provisions, including sections 203, 226, 226.7, 510, and 2699(f)(2) of the California Labor Code.