Executive exemption
California exempts executive employees from its minimum wage and overtime requirements. To qualify as an executive employee, an employee must:
- perform duties and have responsibilities that involve the management of the enterprise in which he/she is employed or of a customarily recognized department or subdivision thereof;
- customarily and regularly directs the work of two or more other employees;
- have 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;
- customarily and regularly exercises discretion and independent judgment;
- primarily engage in exempt job duties as compared to non-exempt job duties (California relies on the federal regulations when determining if an employee performs exempt or non-exempt job duties. See 29 C.F.R. Sections 541.102, 541.104-111, and 541.115-116). Exempt work includes any work that is directly and closely related to exempt work to it and work which is properly viewed as a means for carrying out exempt functions. California considers the amount of time spent performing exempt vs. non-exempt job duties during a workweek and the realistic expectation of the employer and the job with determining if the employee satisfies this requirement);
- be paid a monthly salary that is equivalent to no less than two (2) times the state minimum wage for full-time employment, which is defined in CA Labor Code 515(c) as 40 hours per week.
IWC Orders 1-16: Section 1(A)(1)
Administrative exemption
California exempts administrative employees from its minimum wage and overtime requirements. To qualify as an administrative employee, an employee must:
- perform duties and have responsibilities that involve either:
- performing 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
- performing functions in the administration of a school system, educational establishment or institution, or a department or subdivision thereof, in work directly related to the academic instruction or training carried on therein; and
- customarily and regularly exercises discretion and independent judgment;
- perform duties that involve either:
- regularly and directly assisting a proprietor, or an employee employed in a bona fide executive or administrative capacity (as such terms are defined for purposes of this section);
- working under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or
- execute work under only general supervision special assignments and tasks;
- primarily engage in exempt job duties as compared to non-exempt job duties (California relies on the federal regulations when determining if an employee performs exempt or non-exempt job duties. See 29 C.F.R. Sections 541.201-205, 541.207-208, 541.210, and 541.215). Exempt work includes any work that is directly and closely related to exempt work to it and work which is properly viewed as a means for carrying out exempt functions. California considers the amount of time spent performing exempt vs. non-exempt job duties during a workweek and the realistic expectation of the employer and the job with determining if the employee satisfies this requirement);
- be paid a monthly salary that is equivalent to no less than two (2) times the state minimum wage for full-time employment, which is defined in CA Labor Code 515(c) as 40 hours per week.
IWC Orders 1-16: Section 1(A)(2)
Professional exemption
California exempts professional employees from its minimum wage and overtime requirements. To qualify as a professional employee, an employee must:
- either:
- be licensed or certified by the State of California and primarily engage in the practice law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting; or
- be primarily engaged in an occupation commonly recognized as a learned or artistic profession, which means primarily performing work that:
- requires 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
- 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;
- perform work that 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;
- customarily and regularly exercises discretion and independent judgment in the performance of their duties;
- be paid a monthly salary that is equivalent to no less than two (2) times the state minimum wage for full-time employment, which is defined in CA Labor Code 515(c) as 40 hours per week.
California relies on the federal regulations when determining if an employee performs exempt professional job duties (see 29 C.F.R. Sections 541.207, 541.301(a)-(d), 541.302, 541.306, 541.307, 541.308, and 541.310).
The professional exemption does not apply to pharmacists employed in the practice of pharmacy or registered nurses employed in the practice of nursing, although they may qualify as exempt employees under the executive or administrative exemption. The professional exempt does apply to the following advanced practice nurses, so long as they meet general professional exemption requirements:
- certified nurse midwives who are primarily engaged in performing duties for which certification is required pursuant to Article 2.5 (commencing with Section 2746) of Chapter 6 of Division 2 of the Business and Professions Code.
- certified nurse anesthetists who are primarily engaged in performing duties for which certification is required pursuant to Article 7 (commencing with Section 2825) of Chapter 6 of Division 2 of the Business and Professions Code.
- certified nurse practitioners who are primarily engaged in performing duties for which certification is required pursuant to Article 8 (commencing with Section 2834) of Chapter 6 of Division 2 of the Business and Professions Code.
IWC Orders 1-16: Section 1(A)(3)
Outside salesman exemption
California exempts outside salesmen from its minimum wage and overtime requirements. To qualify as an outside salesman, an employee must:
- be 18 years of age or older;
- customarily and regularly work more than half their time working away from their employer’s place of business;
- sell tangible or intangible items or obtain orders or contracts for products, services, or use facilities.
CA Labor Code 1171; IWC Orders 1-16: Section 2(J)
Computer employee exemption
As part of its professional employee exemption, California exempts computer employees from its minimum wage and overtime requirements. To qualify for the computer employee exemption, an employee must:
- be primarily engaged in work that is intellectual or creative and requires the exercise of discretion and independent judgment.
- be primarily engaged in duties that consist of one or more of the following:
- the application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications.
- the design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications.
- the documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems.
- be highly skilled and proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering (a job title shall not be determinative of the applicability of this exemption);
- be paid an hourly rate not less than the rate set annually by the Office of Policy, Research and Legislation based on the percentage increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers (any increase takes effect on January 1 of the applicable year).
An employee does not qualify for the computer employee exemption if:
- the employee is a trainee or employee in an entry-level position who is learning to become proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering.
- the employee is in a computer-related occupation but has not attained the level of skill and expertise necessary to work independently and without close supervision.
- the employee is engaged in the operation of computers or in the manufacture, repair, or maintenance of computer hardware and related equipment.
- the employee is an engineer, drafter, machinist, or other professional whose work is highly dependent upon or facilitated by the use of computers and computer software programs and who is skilled in computer-aided design software, including CAD/CAM, but who is not in a computer systems analysis or programming occupation.
- the employee is a writer engaged in writing material, including box labels, product descriptions, documentation, promotional material, setup and installation instructions, and other similar written information, either for print or for on screen media or who writes or provides content material intended to be read by customers, subscribers, or visitors to computer-related media such as the World Wide Web or CD-ROMs.
- the employee is engaged in any of the activities set forth in subparagraph (h) for the purpose of creating imagery for effects used in the motion picture, television, or theatrical industry.
IWC Orders 1-16: Section 1(A)(3)(h)
Other minimum wage and overtime exemptions
California also exempts the following individuals from its minimum wage and overtime requirements:
- individuals who are parents, spouses, or children (including legally adopted children) of the employer;
- individuals participating in a national service program, such as AmeriCorps, carried out using assistance provided under Section 12571 of Title 42 of the United States Code
CA Labor Code 1171; IWC Orders 1-16: Section 1(D), (E)
