Exemptions from Overtime Pay

Overtime laws and some other wage and workplace protections, like meal period and rest break laws, do not apply to certain types of employees. Those employees are known as “exempt,” and will not receive overtime pay, even if they work more than eight hours a day or more than forty hours a week. Employees who are exempt from (not covered by) overtime laws usually have a lot of responsibility within a company and have significant input into how that company is run. But employees are not exempt just because an employer says they are exempt or because the employer gives an employee a certain title (for example, “assistant manager”), or pays an employee by the week or month.

    1. How much do I need to make to be considered an exempt employee?

    To be an exempt employee, you need to make twice the minimum wage. State overtime laws do not cover certain employees who are considered “professional,” “managerial,” “executive,” or “administrative” employees. These workers are called “exempt” employees. To be an exempt employee under any of these categories under California law you must earn twice the minimum wage for full-time work. (Lawyers call this amount the “salary basis” test.) The following chart displays the minimum annual salary you must make per year in order to be properly classified as exempt in California, depending on the year and the size of your employer.  If you make less than the amount listed here, you are not exempt and overtime laws will apply to you.  If you make more than the amount listed here, your employer must also prove that you fall into one of the categories discussed in questions 2 through 4 in order for you to be exempt from overtime and other wage-and-hour protections.

    Year Salary basis test for employer with 25 or fewer employees Salary basis test for employer with 26 or more employees
    2021 $54,080.00 $58,240.00
    2022 $58,240.00 $62,400.00
    2023 $62,400.00 TBD

    2. Am I exempt as a professional employee?

    To be exempt from overtime protections as a professional employee, you must make twice the state minimum wage. (See question 1.)

    A professional employee must also either spend at least half of their hours doing work in a field that is commonly considered a “learned or artistic profession,” or spend half of their work time performing tasks in one of the following licensed or certified professions:

    • Optometry;
    • Law (in some circumstances including law school graduates but generally not paralegals);
    • Architecture;
    • Medicine (does not include nurses);
    • Engineering;
    • Dentistry (generally does not include dental hygienists);
    • Teaching; or
    • Accounting (includes only certified public accountants).

     

    For a job to be considered “learned or artistic profession,” the worker must usually have earned a specialized college degree or pursued other paths of intellectual study. A job may also be exempt if the work is original and creative in character and depend primarily on the worker’s own invention, imagination, or talent. Some high-tech and computer industry workers will fall into this category. This exception is very limited, so you should not assume you work in a “learned or artistic profession” just because your job involves some creativity.

    In addition to falling within one of these professional categories, in order to be exempt, you must customarily and regularly exercise discretion and independent judgment over matters of significance.

    3. Am I exempt as an administrative employee?

    To be exempt from overtime protections as an administrative employee, you must make twice the state minimum wage. (See question 1.) You must also be able to answer yes to both of the following requirements:

    • Are you regularly allowed to make independent decisions without direct supervision about matters that are important to the company (this means that the work you do is related to important company policy or business decisions)?
    • Do you spend more than half of your time on administrative tasks that are of substantial importance to management?

    In addition, you must be able to answer yes to one of the following questions:

    • Do you regularly and directly assist the owner of the company or another manager or administrator?
    • Do you perform work that requires special training, experience, or knowledge without direct supervision, or with only minimal supervision?

    Do you perform special assignments that require you to make decisions that affect the company with only general supervision?

    4. Am I exempt from overtime laws as a managerial or executive employee?

    To be exempt from overtime protections as a managerial or executive employee in California, you must make twice the state minimum wage. (See question 1.)

    You must also be able to answer yes to all of the following requirements:

    • Do you spend more than half of your time either managing a distinct department or subdivision of the company or doing “managerial” work (managerial work includes doing things like assigning work to other people, supervising work, evaluating other employees, planning work, determining techniques to be used in completing work, keeping records, handling complaints, and controlling the flow of merchandise or supplies)?
    • Are you regularly allowed to make independent decisions without direct supervision about matters that are important to the company (this means that the work you do is related to important company policy or business decisions)?
    • Do you directly supervise the work of two or more full-time employees? (Supervision of these employees must be part of your regular job duties, and not just something you do when the regular supervisor is not at work.)
    • Do you make recommendations about the hiring and firing of employees, and have enough authority within the company that your recommendations are given serious attention?

    If you answered no to any of these questions, you cannot be considered exempt as a managerial or executive employee.

    5. Am I entitled to overtime if I work for a family member?

    It depends. If you work directly for your spouse, parent, or child, you do not have the right to overtime. Other close relatives (e.g., uncles, aunts, and siblings) are fully protected by the law and are entitled to overtime.

    Importantly, if you work for a corporation or a limited liability company (an LLC) that is owned by your spouse, parent, or child, you are entitled to overtime protections, because you work for the company, not the individual.

    6. I am in a union. Am I entitled to overtime?

    Yes, but different rules apply. If you are a union member, overtime laws may apply somewhat differently because of language included in your collective bargaining agreement, which is sometimes called the “CBA.” If your collective bargaining agreement (1) provides for a premium wage (which can be anything above the regular rate of pay, even if less than time and a half), and (2) establishes a minimum wage for workers at your company that is at least 30 percent more than the state minimum wage, your employer may not have to pay you overtime for working over 8 hours a day. But the employer would still have to pay you overtime if you worked over 40 hours a week. If you have questions about overtime and you work in a unionized workplace, you can usually get advice from your union about how overtime works in your workplace.

    7. I am a farm laborer. Am I entitled to overtime?

    Yes, but different rules apply for agricultural workers performing work related to the cultivation of produce, livestock, and most other farm products, except cannabis. When performing these tasks, agricultural workers in California working at employers with 26 or more employees are not entitled to the same overtime rules as other employees until 2022. Agricultural workers in California working at employers with 25 or less employees are not entitled to the same overtime rules as other employees until 2025. Until then, overtime rules depend on the size of the employer that the worker is employed by.

    Year Overtime Rules for Employers with 25 or Less Employees Overtime Rules for Employers with 26 or More Employees
    2021 Overtime after 10 hours a day, or 60 hours in a week. Overtime after 8.5 hours a day, or 45 hours in a week.
    2022 Overtime after 9.5 hours a day, or 55 hours in a week. Regular overtime rules apply (overtime after 8 hours a day or 40 hours a week).
    2023 Overtime after 9 hours a day, or 50 hours in a week.
    2024 Overtime after 8.5 hours a day, or 45 hours in a week.

     

    Agricultural workers subject to these special rules are usually eligible for overtime for time spent working on the seventh consecutive day of a single workweek, and double time for any work after the eighth hour of work on the seventh consecutive day of a single workweek.

    Not all agricultural work is covered by these special rules. Regular overtime rules apply to many workers who distribute, pack, process, sort, and handle crops after those crops have been harvested. Also, workers who work in the Cannabis industry are not considered agricultural workers, and are entitled to overtime at normal rates.

    8. I am a domestic worker. Am I eligible for overtime?

    Domestic workers are entitled to overtime, but the rules covering overtime for domestic workers are complicated and depend on a number of factors, including whether the worker is a “personal attendant,” whether they work in a private household, and whether they live in the household.

    Domestic workers that do not live-in the household and are not personal attendants are entitled to overtime pay under the normal overtime rules (overtime after 8 hours a day or 40 hours a week).

    Other workers may only be eligible for overtime after working 45 hours a week, or 9 hours a day, depending on the factual circumstances. For more information, check out the California Domestic Workers’ Coalition and the Department of Labor Standards and Enforcement website.

    9. I am a truck driver. Am I eligible for overtime?

    Many truck drivers are exempt from state and federal overtime laws.  For example, truck drivers that are regulated by the Federal Motor Carrier Safety Administration (FMCSA) are exempt from California overtime laws, as well as California laws governing meal and rest breaks. A driver is regulated by the FMCSA if they are involved with interstate commerce AND fit in one or more of the following categories:

    • Drive a vehicle that weighs 10,001 pounds or more
    • Drive a vehicle that is designed to transport 9-15 passengers for compensation
    • Drive a vehicle that is designed to transport 16 or more passengers
    • Drive a vehicle used to transport hazardous materials

    Truck drivers that are regulated by California Highway Patrol (CHP) are also exempt from California Overtime Laws. Examples of the vehicles regulated by CHP include motortrucks, truck tractor, buses, tailors, and commercial motor vehicles that weigh more that 10,000 pounds.

    If you are a truck driver and want to know whether you might be protected by California overtime laws, seek legal advice.