Exempt from California Overtime?

Temecula, CAAnna is in a quandary: she thinks her employer has classified her as exempt to avoid paying California overtime, but she has spoken out and is now working in a “borderline hostile environment.” An employment attorney would likely tell Anna that retaliation is a violation of the California labor code; determining whether or not Anna is exempt, however, is not so easy to determine.

To begin with, Anna is paid an hourly rate rather than collecting a salary and she doesn’t supervise anyone. Both these conditions lead Anna to believe that she has been misclassified. “I believe the company I work for has classified us under the guise of exempt as a way of not paying overtime,” says Anna. “I have been working here for more than 11 years and I have always been paid an hourly rate. I’m not guaranteed an exact amount of money per week, but I am guaranteed to work 80 hours per pay period, or every two weeks.”

But Anna typically works a 10-hour day and for many years she worked 12-hour days. “Over all these years I couldn’t begin to guess how much money they owe me in overtime pay,” Anna adds. “They worked me so hard and I put in so many hours that I almost had a nervous breakdown. When I tried to take this issue to HR they didn’t back me up. That is when I saw my doctor and I had to take time off work. During that time they gave my position to someone else (I was gone from February to July) and when I returned I was never promoted. When I went out on disability I was working easily 12 hours a day.”

For the past 11 years, Anna has been working as a case manager for a medical management company. Her job description mainly comprises reviews of a hospital and reporting back to the company on a daily basis. As she said, this is not a supervisory role. Anna is a professional employee, however. On the surface, it would seem that she would be exempt from overtime.

To be exempt from overtime, an employee must do work that is mainly administrative, professional or executive in nature. This means performing work that is non-manual, related to management policies, involves discretion and judgment, directs other employees, and be paid salary. Anna is paid $40 per hour; she is not on salary.

According to Section 13(a)(1) of the FLSA, she doesn’t qualify as exempt as an Executive Employee because she does not “customarily and regularly direct the work of two or more other full-time employees.”

She cannot be exempt as an Administrative Employee because she does not “regularly and directly assist a bona fide executive or administrative employees,” and she is not paid salary.

The third and last definition of exempt is that of a professional employee. Anna could be classified as exempt in this category, but for the fact that she is not “ paid on a salary basis.”

“I asked HR how they could classify me as exempt when I don’t supervise anyone,” says Anna. “They said there is more to the California labor law than supervising to be qualified as an exempt employee. I called the California labor board three weeks ago and haven’t heard back yet. So now I am going to seek help from an employment attorney and find out once and for all the California overtime law and its definitions of exempt.

“From what I understand, nobody gets paid overtime at this company that employs over 400 workers - we just got bought out by Optum HealthCare, but I don’t know if that is going to change our unpaid overtime issues. Everyone is afraid of speaking up - they are afraid of losing their jobs if overtime pay laws are mentioned. My husband used to be a manager and he keeps telling me ‘They can’t do this to you.’”

But they are doing it. Anna wouldn’t be so adamant about these overtime issues if she was given time off now and then without having a pay cut. “We used to be able to take an hour off work for a doctor’s appointment but now we aren’t allowed to do that,” Anna explains. “We have to put in eight hours of work each day. My immediate supervisor [another reason why Anna should not be exempt] says we cannot take personal time - I am being chastised and made to feel like I am doing something wrong. But they conveniently forget about all the overtime pay owed.”

Anna finally spoke up, not just for herself but also for her co-workers, demanding overtime compensation. “My immediate super is also the VP of the company, so now I have created a borderline hostile work environment. She doesn’t make it easy. Meanwhile I tell my husband what is going on and he is getting angrier and angrier.

“I’m still working, I can’t afford not to, even though it is very difficult to work in this place. They should either make us non-exempt, pay an hourly wage, and not get paid for taking time off, or classify us as exempt and give us the flexibility to take time off as long as we get the job done. They can’t have it both ways.”