State and federal laws afford certain rights and benefits to nonexempt employees. Exempt employees, on the other hand, aren't legally entitled to overtime or breaks. California law only allows certain employees to be classified as exempt. In addition to meeting certain professional requirements, exempt employees must be paid the equivalent of more than twice the state's minimum wage.
Exempt vs. Nonexempt
California and federal labor laws require employers to provide employees with certain rights. State law requires employers to pay an overtime rate of at least one-and-a-half times the normal pay rate to nonexempt employees who work more than eight hours a day or more than 40 hours a week. The state also requires a nonexempt employee to take at least a half-hour unpaid meal break if the employee works more than six hours that day. Nonexempt employees also are entitled to a ten minute paid break for every four hours worked.
Who Can Be Exempt In California
As the name implies, exempt employees are exempt from overtime and break regulations. California only allows certain employees to be classified as exempt. Currently, executives, learned professionals, creative professionals, administrative workers, outside salesmen, computer professionals, physicians and employees who earn over $100,000 a year may be considered exempt. To be exempt, the employee must be required to exercise independent discretion and judgement and paid a salary that's equivalent to at least twice the state minimum wage. Since the state minimum wage is currently $9 an hour, that means an exempt employee must make an equivalent of more than $18 an hour, assuming a 40 hour work week, or more than $37,440 annually.
Overtime and Breaks
California law does not require employers to pay overtime rates, provide breaks or track employee time for exempt workers. That means that an exempt California employee will be paid the same salary whether he works 40 hours or 70 hours in a week. Exempt employees can skip meal breaks and aren't required to take paid ten minute breaks. Employers don't have to track employee time or require them to use a time clock. However, many do track employee time for billing or expense allocation purposes.
Employers may furlough exempt employees if they choose. A furlough occurs when an employer reduces the amount of hours an employee works per week, month, or year and reduces salary accordingly. For example, an employer could require an employee to take one furlough day a month and reduce his salary by 5 percent. However, the employer cannot reduce the salary so that it is equivalent to less than twice the current minimum wage. If the salary drops below this point, the employee becomes a nonexempt employee.
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