Overtime can be a significant boost to your paycheck, especially if you regularly work long hours. Under California law, most employees are entitled to time and a half for all hours worked over eight in a day or 40 in a week, as well as double time for hours over 12 in a day.
However, some employers attempt to reduce overtime costs by misclassifying employees as “exempt” from overtime requirements. If you have been wrongly denied overtime, this is not only unfair — it may also be illegal.
In this article, we will discuss what “exempt” really means under the law, how misclassification happens, red flags to look out for, and what you can do if you have been denied overtime pay illegally.
Employee Misclassification: What It Is and Why It Is Illegal
In employment law, “exempt” refers to workers who are exempt from California overtime laws. In other words, exempt employees are not entitled to overtime pay for working over eight hours a day or 40 hours a week.
However, not all employees can be exempt. To be lawfully exempt from overtime requirements, an employee must meet the following:
- Have certain types of job duties
- Be paid on a salary basis, not hourly
- Earn at least the minimum salary required by California’s salary threshold (currently at least double the state minimum wage for full-time employees)
This generally applies to certain categories of “white collar” employees, including these:
- Executive employees (managers who supervise two or more people and have hiring and firing authority)
- Administrative employees (staff who does high-level office or business work, not routine clerical tasks)
- Professional employees (licensed professionals such as lawyers, doctors, or certain creative workers)
If your role does not fall into one of these categories, you should be nonexempt and entitled to overtime.
Ways That Employers Misclassify Employees
Misclassification is not always an honest mistake. Some employers deliberately classify employees as exempt so they can save money by not paying overtime, avoiding meal and rest break premiums, and not tracking hours.
Below are the most common types of misclassification:
- Labeling hourly workers as “salaried” employees: Employers put an hourly worker on a salary and tell them they are exempt, even though the role does not meet the duties test for an exemption.
- Jacking up job titles: You get the title of “manager,” but in reality, you have little or no authority to make decisions or supervise people.
- Lowball salaries: Even if you technically pass the duties test, your salary must meet a minimum level to be exempt. Otherwise, you should be paid overtime.
- Misclassifying gig workers or independent contractors: If your employer is actually exerting control over how, when, and where you work, you may be legally an employee and entitled to overtime.
Penalties for Misclassification
California takes wage theft seriously. Employers who misclassify employees can be subject to the following penalties:
- Unpaid overtime, at time-and-a-half and double-time rates
- Meal and rest break penalties
- Waiting time penalties of up to 30 days of wages if you were not paid all wages that were due to you at termination
- Interest on unpaid wages
- Attorneys’ fees
If numerous workers within a business or organization are affected by misclassification, it can also result in a class-action lawsuit.
Steps To Take If You Think You Are Misclassified
1. Track your hours worked
Even if you are on a salary, start keeping your own record of start and end times, meal breaks, and overtime worked. This evidence will be key later if you file a claim.
2. Review your job duties
Take a look at what you do every day. Do your job duties really fit your job title? Are you supervising people? Are you making important decisions for the team, or are you just following orders?
3. Check your pay rate
Look at your salary compared to California’s current minimum salary threshold for exempt employees. If you are paid less than the threshold, you are likely nonexempt.
4. Gather documentation
Keep pay stubs, job descriptions, work schedules, and company handbooks. Save any emails or text messages where you inquired about your hours with your boss.
5. Contact human resources (if you deem it to be necessary)
You can raise concerns internally, but be aware that some employers may not take it well or may retaliate. Document all communications.
6. Consult with a well-versed California employment attorney
An attorney can evaluate your duties, salary, and hours to advise if you should be receiving overtime pay legally.
Damages That You May Recover
If you have been misclassified, you may be able to recover the following:
- Back wages for up to four years of unpaid overtime
- Interest on unpaid wages
- Meal and rest break penalties
- Waiting time penalties if you quit the job and were not properly paid
- Attorneys’ fees if you prevail in a lawsuit
For many employees, this adds up to thousands or tens of thousands of dollars.
The Role of an Employment Lawyer in California Employee Misclassification Cases
It can be intimidating to take on misclassification claims without representation. An experienced employment lawyer can conduct the following:
- Analyze your job duties, pay structure, and hours worked
- Calculate the overtime and penalties due to you
- File a claim with the California Labor Commissioner or pursue a lawsuit in court
- Negotiate a fair settlement on your behalf
- Protect you from retaliation and pursue a separate retaliation claim, if necessary
Most employment attorneys work on a contingency fee basis, which means you pay nothing up-front and they only get paid if they recover money for you.
Job Titles Don’t Matter, But Your Pay Does — Get Help Today
Job titles do not automatically exempt employees from overtime laws. The important factors are your actual job duties and whether your employer properly compensated you for extra hours worked. The good news is that California law is on the side of employees. If something doesn’t seem right about how you are being paid, start documenting your hours and talk to an attorney as soon as possible. Recovering unpaid overtime can change your life, and we are here to help you hold your employer accountable. Contact our office to discuss.
