I was hired as a W2 employee by a consulting firm (employer) to work for a biotech in a position described in the contract as being non-exempt. However when I worked extra hours, the biotech refused to pay the extra hours at 1.5 because the position is classified as exempt internally by the biotech. The employer later reluctantly amended the contract to show the position as exempt after I contacted the labor dept and found that the position should be exempt as per the WIC.
I later found out that the employer classify all its (100s) other employees as non-exempt and assign them to work at exempt positions.
What are the legal implications of this situation?
Why would an employer classify all their employees as non-exempt while they work in exempt positions?
Is this related to not providing
It is very unusual for an employer to classify all 100 employees as non-exempt and yet assign them work at exempt positions. Is this employer paying its employees overtime?
California Labor Code § 515(a) authorizes the California Industrial Wage Commission (IWC) to establish exemptions from the overtime requirements for executive, administrative, and professional employees, “provided that the employee is primarily engaged in the duties that meet the test of the exemption, customarily and regularly exercises discretion and independent judgment in performing those duties, and earns a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.”
Pursuant to this authority, the IWC has promulgated wage order No. 4-2001, which defines the professional exemption as applicable to an employee who “is licensed or certified by the State of California and is primarily engaged in the practice of…law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting” or “[w]ho is primarily engaged in an occupation commonly recognized as a learned or artistic profession.”
The IWC order provides that a “learned or artistic profession” involves the performance of work “requiring 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” and which “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.”
If you are non-exempt, California law requires that employers pay overtime, whether authorized or not, at the rate of one and one-half times the employee's regular rate of pay for all hours worked in excess of eight up to an including 12 hours in any workday, and for the first eight hours of work on the seventh consecutive day of work in a workweek, and double the employee's regular rate of pay for all hours worked in excess of 12 in any workday and for all hours worked in excess of eight on the seventh consecutive day of work in a workweek.
Frank W. Chen is licensed to practice law in the State of California. The information presented here is general in nature and is not intended, nor should be construed, as legal advice. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, consult your own attorney.
I wish to comment on Frank Wei-Hong Chen's response which I thought was very informative and precise. One issue I think that still would remain outstanding is that I believe this subject employee,while the company retained him as non-exempt and during the period until such time as the contract was changed to an exempt employee for that period, I would still believe the company should be responsible for all overtime pay and related penalties.
I hope this is helpful.
John N. Kitta
Since you have not described the work that you do, it is hard to opine as to whether you are being properly classified. As a shorthand answer, if you are doing working that does not require a professional license and are not supervising other workers more than 51% of the time, you may have been misclassified. A key factor to keep in mind, is that the manner in which the employer chooses to clasifficy the worker is irrelevant to the proper classification. You should sit down with a lawyer and go over your duties to see whether you have been properly classified.
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