Pursuant to the Labor Code and applicable Wage Orders, an employee is automatically presumed to be a non-exempt employee unless the employer can prove that a particular exemption applies.
What is the “White Collar” Exemption?
There are generally three types of “white collar” exemptions under the California Labor Code and Wage Orders: the Administrative Exemption, the Professional Exemption, and the Executive Exemption. Each exemption has narrow duties and responsibilities that the employer must prove the employee carried out, or was responsible to carry out, for at least 50% of their working hours. In addition, each exemption requires that the employer pay the employee a minimum salary of at least two times the state minimum wage for full-time (40 hour/week) employment. It is important to note that incentivized bonuses and commissions do not count toward the minimum salary requirement.
What is the Outside Sales Exemption?
In order to qualify as an “outside salesperson,” a worker must regularly spend over half of their time working away from the employer’s place of business selling goods or services. A sales worker might be misclassified even when working away from an employer’s main office if the employer exercised a certain degree of control over the hours and working conditions at the location(s) the work was carried out. If an employer cannot prove that an employee was properly classified as an outside salesperson, the worker may be entitled to wages for all time worked, including overtime pay, liquidated damages, meal and rest period premiums, and other statutory penalties.
What is the Inside Sales Exemption?
In order to qualify as an “inside salesperson,” an employer must pay an employee over one-and-a-half times the state minimum wage and over half of the employee’s total earnings must be from commissions in addition to the hourly wage that is at least one-and-a-half times the state minimum wage. However, unlike the outside sales exemption, even if an employee is properly classified as an inside salesperson, they are still entitled to wages for all time worked and to meal and rest periods. If an employer cannot prove that an employee was properly classified as an inside salesperson, the worker may be entitled to overtime pay, liquidated damages, and other statutory penalties.
Legal Liability
If your employer has misclassified you as exempt, you may be entitled to unpaid wages, overtime pay, meal and rest period premiums, statutory penalties, and interest.
The content on this website is not legal advice, does not establish an attorney-client relationship, and does not guarantee any particular outcome.
