Wage & Hour Laws

California’s wage and hour laws are too extensive to describe in full. However, below are a few common topics relevant to most employees and employers.

Exempt Status:

Generally, with some limited exceptions, exempt employees are executive, administrative, or professional employees who meet certain substantive requirements for exemption from the overtime pay provisions of federal and state law and thus are not eligible for overtime pay. In addition to the detailed and often onerous substantive requirements described below, an exempt employee must earn a monthly salary equivalent to no less than two (2) times the state minimum wage for full-time employment to qualify as exempt. Because the minimum wage is currently $8.00 per hour in California, the minimum annual salary for these classes of exempt employees is $33,280.00.

Executive Exemption: A person employed in an executive capacity is defined by the IWC Wage Orders as any employee: (a) whose duties and responsibilities involve the management of the enterprise in which he/she is employed or of a customarily recognized department or subdivision thereof; and (b) who customarily and regularly directs the work of two or more other employees therein; and (c) who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight; and (d) who customarily and regularly exercises discretion and independent judgment; and (e) who is primarily engaged in duties which meet the test of the exemption.

Administrative Exemption: A person employed in an administrative capacity is defined by the IWC Wage Orders as any employee: (a) whose duties and responsibilities involve either: (i) the performance of office or non-manual work directly related to management policies or general business operations of his/her employer or his/her employer’s customers; or (ii) The performance of functions in the administration of a school system, or educational establishment or institution, or of a department or subdivision thereof, in work directly related to the academic instruction or training carried on therein; and (b) who customarily and regularly exercises discretion and independent judgment; and (c) who regularly and directly assists a proprietor, or an employee employed in a bona fide executive or administrative capacity (as such terms are defined for purposes of this section); or (d) who performs under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or (e) who executes under only general supervision special assignments and tasks; and (f) who is primarily engaged in duties that meet the test of the exemption.

Professional Exemption: A person employed in a professional capacity means any employee who meets all of the following requirements: (a) who is licensed or certified by the State of California and is primarily engaged in the practice of one of the following recognized professions: law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting; or (b) who is primarily engaged in an occupation commonly recognized as a learned or artistic profession; and (c) who customarily and regularly exercises discretion and independent judgment in the performance of duties set forth in subparagraphs (a) and (b). “Learned or artistic profession” means an employee who is primarily engaged in the performance of: (i) Work requiring knowledge of an advanced type in a field or science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from a general academic education and from an apprenticeship, and from training in the performance of routine mental, manual, or physical processes, or work that is an essential part of or necessarily incident to any of the above work; or (ii) Work that is original and creative in character in a recognized field of artistic endeavor (as opposed to work which can be produced by a person endowed with general manual or intellectual ability and training), and the result of which depends primarily on the invention, imagination, or talent of the employee or work that is an essential part of or necessarily incident to any of the above work; and (iii) whose work is predominantly intellectual and varied in character (as opposed to routine mental, manual, mechanical, or physical work) and is of such character that the output produced or the result accomplished cannot be standardized in relation to a given period of time.

Payment of Overtime

Employees who are not exempt must be paid overtime in accordance with state or federal wage and hour laws. In California, this generally means that non-exempt employees must be paid at the rate of time and a half their regular hourly rate of pay for hours worked over 8 and up to and including 12 hours in a workday, for hours worked over 40 hours in a workweek, and for the first 8 hours on the 7th consecutive day of work in a workweek. Non-exempt employees must also be paid 2 times their regular rate of pay for hours worked over 12 hours in one workday and for hours worked over 8 hours on the 7th consecutive workday in a workweek.

Rest Breaks and Meal Periods

For every three and a half hours worked, non-exempt employees are entitled to a 10-minute break period. Employees are paid for these breaks despite the fact that they are not to be performing any job duties during the break. Non-exempt employees are also entitled to a 30-minute, uninterrupted meal period during a workday in excess of five hours. Employees who work over 10 hours in a workday are entitled to two 30-minute, uninterrupted meal periods. Employees do not need to be paid during their meal period(s). Further, employees who work less than six hours in a day may waive the meal period if the employer and the employee consent to the waiver in writing.

Employees who are not provided or allowed to take a rest break and/or an uninterrupted meal period must be paid one additional hour of pay at the employee’s regular rate of compensation for each work day that the meal or rest period is not provided.

Expense Reimbursements

Pursuant to California Labor Code Section 2802, employers must indemnify employees for necessary expenditures or losses incurred in direct consequence of the discharge of their duties. This includes all reasonable expenses incurred as a result of an employee’s employment, such as mileage, cell phone usage, and even business development expenses.