When California employers decide to cut costs by paying non-exempt employees a salary and calling them “exempt,” workers call on Strauss & Strauss, APC to recover unpaid overtime. So far, we have recovered millions of dollars for these misclassified-exempt employees.
Examples of recent misclassification cases we have taken include:
- Misclassified as exempt employee: Employer wrongfully paid dishwasher repair man as salaried-exempt and did not pay them overtime
- Misclassified as exempt employee: Employer wrongfully paid computer software technicians as salaried-exempt even though they did not earn enough per hour to make them exempt under California law
- Misclassified as exempt employee: Employer wrongfully paid office administrator as exempt in order to avoid having to pay overtime
- Misclassified as exempt employee: Employer wrongfully paid employee of dry cleaner as exempt from overtime, but she did not exercise discretion and independent judgment over 50% of the time
- Misclassified as independent contractor: Employer paid employee with 1099 even though he was not an independent contractor
- Misclassified as exempt employee: Large class action recovery against employer who classified pest control inspectors as exempt
Learn more about California wage and hour law in our frequently asked question (FAQ) section.
Non-Exempt Workers Misclassified as Exempt
California employers like to cut down on their payroll expenses in creative ways. One such way is to pay non-exempt employees as exempt; that is, they put a non-exempt worker on a salary and think that this should make them exempt from overtime, meal periods, double time, and more.
- “Exempt” means the employee doesn’t need to be paid overtime or double time.
- “Non-exempt” means the employee needs to be paid overtime and double time.
Putting a non-exempt worker on a salary does not make that employee exempt. A worker is exempt only if they fit into very narrowly defined categories.
Who Is Exempt?
Generally speaking, only professionals, executives, and high-level administrative employees are exempt, but then only if they are paid salary.
Usually, if an employee is paid a salary that — when divided by the number of hours in a work year (2080) — is less than twice minimum wage, that employee cannot be exempt.
Certain computer programmers who are paid by the hour can be exempt.
Salespersons who earn 100% commission wages and spend more than 50% of their time selling outside of their office are typically exempt. So too are “inside salespersons” whose salary is made up of 51% or more in commissions and they make more than 1.5 times the minimum wage.
Who Is Non-Exempt?
Most California employees are non-exempt. If an employee is paid on an hourly basis, then more than likely that employee is non-exempt.
"Strauss & Strauss represented me in several cases against a former employer. They were taking on a Fortune 500 company that employed some of the world's biggest law firms. Michael Strauss and Andrew Ellison beat them every time."Stephen Craig
A California worker who is misclassified as exempt more likely than not can bring wage claims against their employer for unpaid overtime, missed meal periods and rest periods, unpaid minimum wage, and unpaid double time. That same employee can also seek penalties against the employer for failing to pay all wages owed, so long as the employee no longer works for the employer. Interest at 10% on all wages owed is also available. Finally, if the employee brings a civil lawsuit in state court to collect unpaid wages, the employee can seek their attorney fees. (Attorney fees are not available if the employee brings a wage claim with the California Labor Commissioner/Labor Board.
If you believe you are a non-exempt worker who was paid as exempt, contact a lawyer for a free case evaluation.
- Ayala v. Terminix International, Inc.
- Bankwitz v. Ecolab Inc. - Territory Manager Overtime Lawsuit
- Bautista v. Alliance Environmental Group
- Berry v. DCOR, LLC
- Bognuda v. Great White Dental
- Campos v. Ecolab Inc. – California Route Sales Manager (RSM) Lawsuit