Employee exempt or non-exempt status is a critical issue that California employers must get right. If an employee is incorrectly classified as exempt, there are benefits to which the employee is entitled that may cause California Labor Code violations. The employer faces the potential for significant legal penalties.
An exempt or non-exempt classification is based on the employee’s full scope of responsibilities. The status is not determined solely based on compensation or job title.
For example, exempt employees are not required to be paid overtime premium wages.
Employers must take appropriate measures to properly classify employees and comply with the applicable federal, state or local law that provides employees with the greatest protections and/or rights.
The California Chamber of Commerce is an excellent resource to help California employers understand exempt versus non-exempt employee status in California.