Hourly vs. salaried employees

Employers often classify their employees as hourly or salaried. Hourly employees are paid for all of the hours they work, including overtime. Salaried employees are paid a set sum each pay period and do not receive overtime pay, even if they work overtime.

Under California law, a salaried employee is called an “exempt” employee and an hourly employee is called a “nonexempt” employee.

Why does it matter what my employment status is?

Determining whether you are an exempt or nonexempt employee is important because you are entitled to certain legal rights and overtime pay based on your employment status. For instance, if you are a nonexempt employee, California law requires that workers must be paid overtime (a time and a half) for any hours over 8 hours in a day or over 40 in a single week. However, if you are an exempt employee, the law does not require that overtime be paid.

Am I an exempt employee or non-exempt employee?

The nonexempt / exempt status can be determined by a careful analysis of your actual job duties and responsibilities, your level, and your form of compensation (not your job title or the label from your employee).

Nonexempt employees are generally paid hourly and are usually considered to be nonexempt regardless of the hourly rate paid. Employees generally classified as nonexempt include, but are not limited to, clerical and office workers, blue-collar, maintenance, construction, and semiskilled workers, as well as technicians and laborers. Generally, most employees are nonexempt and must be paid overtime.

Exempt employees generally perform relatively high-level duties regardless of job title, such as attorneys, engineers, and accountants. These employees are referred to as “white collar” workers because they are highly skilled and formally trained professionals who typically perform job duties in an office setting.

How do I know if I am classified correctly?

Unfortunately, there is no clear bright line rule that separates an exempt from a nonexempt employee. If you are having trouble determining whether you have been improperly characterized as an exempt employee and do not know how to calculate how much money is owed to you, we can help. If you are an employer, we can help you avoid employment law violations and craft a compensation system to avoid lawsuits and minimize future legal costs. The attornies of Mentis Law Group specializes in handling employment issues including wage and hour matters, representing both employees and employers.

Please call attorneys at Mentis Law Group at (714) 734-8999 for a confidential and complimentary consultation to determine your legal rights and options.