Classifying employees correctly is beneficial for both employees and employers.
If you are an employee and your employer misclassifies you, you could lose out financially.
If you are an employer and you misclassify an employee, you might be paying them more than you need to. Or, if you are paying them less than you should, you could end up facing a lawsuit.
Workers will be either exempt or non-exempt
California has some of the strictest labor laws, and it considers they apply to almost all workers. Anyone covered by all these laws is a non-exempt worker. Their employer must pay them at least the minimum wage and overtime at time and a half for anything over 40 hours per week.
What do exempt workers lose?
Some employers across the country put people on a salary that ends up being less than the minimum wage when you consider the hours they work. Others give them a title to do with sales or management to avoid needing to pay overtime.
In California, this is not enough. The state considers what duties the person performs and how much they earn. To classify as exempt in California, you would need to be earning the equivalent of two times minimum wage for full employment. That is over $4,000 a month.
Paid meal or rest breaks are other benefits that exempt workers could lose out on.
If you are unsure about how your employees are classified or how your employer has classified you, seek legal help to make sure you get it right and correct any errors.