Under California law, employees are presumptively entitled to overtime pay if they work more than eight hours a day or 40 hours a week.[1] However, some categories of employees are exempt from the mandatory overtime requirement pursuant to wage orders issued by the Industrial Welfare Commission (“IWC”).[2] The IWC has promulgated 17 different “wage orders” that apply to distinct groups of employees.[3] Wage Order 4-2001 exempts persons employed in “administrative,” “executive,” and “professional” capacities.[4] IWC wage order No. 4-2001 expressly incorporates certain Federal Labor Standards Act (“FLSA”) regulations effective as of the date that wage order was issued. The definition of the administrative and professional sexemption provided in IWC wage order No. 4-2001 closely parallels the federal regulatory definition of the same exemption.
A person employed in an administrative capacity is defined in part as any employee:
- Whose duties and responsibilities involve the performance of office or non-manual work directly related to management policies or general business operations of the employer or the employer’s customers; and
- Who customarily and regularly exercises discretion and independent judgment; and
- Who performs under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge, or who executes under only general supervision special assignments and tasks; and
- Who is primarily engaged in duties that meet the test of the exemption; and
- Who earns a monthly salary equivalent to at least two times the state minimum wage for full-time employment.[5]
A person employed in a professional capacity is defined in part as any employee:
- Who is licensed or certified by the State of California and is primarily engaged in the practice of one of the following recognized professions: law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting; or
- Who is primarily engaged in an occupation commonly recognized as a learned or artistic profession;
- Who customarily and regularly exercises discretion and independent judgment in the performance of duties; and
- Who earns a monthly salary equivalent to no less than two (2) times the state minimum wage for full-time employment.[6]
[1] Cal. Lab. Code § 510, subd. (a).
[2] The IWC, established by the Legislature in 1913, was the state agency authorized to formulate the regulations, or wage orders, that govern employment in California. In fulfilling its broad statutory mandate to regulate wages, hours, and working conditions of California employees, the IWC acted in a quasi-legislative capacity. Although the IWC was defunded effective July 1, 2004, its wage orders remain in effect.
[3] Cal. Code Regs., tit. 8, §§ 11010-11170.
[4] Cal. Code Regs., tit. 8, § 11040.
[5] Wage Order 4-2001, Cal. Code Regs., tit. 8, § 11040, subd. 1(A)(2).
[6] Cal. Code Regs., tit. 8, § 11040, subd. 1(A) (3).
