There are several key points of understanding when it comes to determining whether you are exempt under the California overtime pay laws.
First, the burden is on your Employer to prove you are exempt. The governing case on this issue can be found at Nordquist v. McGraw-Hill Broadcasting Company (1995) 32 Cal.App.4th 555, 562.
Second, the actual job duties you perform and not your job title or job description determine if you are exempt or non-exempt.
Third, exemptions under the California Labor Code (state law) and exemptions under the Fair Labor Standards Act (federal law) may vary.
A recent California Second District Court of Appeal decision shed light on the meaning of this requirement: Harris v. Superior Court, 154 Cal.App.4th 164 (2007). In order to satisfy this requirement, the Employee's work must be: (1) "administrative, as opposed to production work," and (2) "of substantial importance to the management or operation of the business." The first half of this test has caused the most confusion and is commonly referred to in case law as the "administrative/production worker dichotomy." The Harris court explained that "work performed at the level of policy or general operations" qualifies as administrative work, whereas "work that merely carries out the particular, day-to-day operations of the business is production, not administrative work."
In order to satisfy the administrative exemption, an Employee must perform office or non-manual work that is directly related to the management policies or general business operations of the Employer or the Employer's customers. Employers sometimes err in applying the administrative exemption to situations in which Employees exercise independence and discretion in their positions (for example, insurance underwriters or brokers), but are not performing “administrative” work relating to the Employer's policies or operations. Rather, such Employees fulfill a “production” function in the organization because the duties directly relate to the generation of revenue.
If you feel you are classified improperly as administrative exempt, and may be entitled to back overtime compensation, it is prudent to have a California labor law attorney review your situation.
