exemptions

WHITE COLLAR EXEMPTIONS

Again, using the chart from the previous page, I noted that the first class of exemptions to consider are the so-called "White Collar Exemptions," which are in effect under both the FLSA and California Law. Each law provides a different three-prong test to determine whether a particular job is exempted.

FEDERAL

Part One-Salary Basis: To be exempt under the FLSA, an employee must be paid on a salary basis. Gavin certainly does not qualify for this portion, so we will come back to this later. Summer might, so long as deductions are not taken from her paycheck if, for example, she is late to work one morning or leaves mid-day for a doctors' appointment.

Part Two-Primary Duties: There are three possible ways to meet the requirements of this test: Executive (29 C.F.R. §§ 100-106), Administrative (29 C.F.R. §§ 200-204) and Professional (29 C.F.R. §§ 300-304).

Neither of our hypothetical workers meet this standard for exemption. This is a hotly contested area, however, and often requires a fact-intensive inquiry into the duties of the worker. If the definitional regulations fail to provide answers, further research can be easily conducted by clicking on Notes of Decisions below the text of the regulation if you are reading them on Westlaw (this feature is not available in Lexis).

Another way to conduct further research on a regulation is by looking up the statute authorizing the regulation in an annotated code. The authority for the regulations is listed below (or at the end of, in the case of hard copies of the C.F.R.) the text of the regulation, in this case, 29 U.S.C. 213.

The annotated statute provides citations to legal encyclopedias dealing with specific industries and specific provisions of this code section, as well as a topical index to cases interpreting the code. This index includes a section for Executive and Administrative Employees that is broken down further by industry and type of job. The cases cited in each subdivision are helpful starting points for further research.

Part Three-Salary Level: This test requires the employee to make at least $455/week, which translates to just over $23,000/year. There is no provision in the regulations for, e.g., an annual increase. Changes to the C.F.R. are made by agency rulemaking (noted in "source" below the text of the regulation).

Both our hypothetical employees make above this amount. Indeed, they would be hard pressed to live in the Bay Area if they did not. Since they do not meet all parts of the test, though, they are not exempt under the federal white collar exemptions.

CALIFORNIA

This likely means they are also not exempt under California law, as the test here is more narrowly construed, making fewer workers exempt under the white collar provisions. It's always best to be safe, though.

Part One-Primary Duties: California Law defines a primary duty as one engaged in more than 50% of the time. Cal.Lab.C. § 515(e).

The primary duties of each of the three white-collar exemption categories are laid out in the Wage Orders. The exemption language is largely the same Wage Order to Wage Order.

Again, neither of our two hypothetical workers performs duties that would make them exempt under the white collar exemptions, and so we will leave them momentarily.

In cases where there is a closer call, additional research may be done by looking up Cal.Lab.C. § 515 in an annotated statute book, such as Deerings or online through Westlaw and Lexis. West, for example, has citations to legal encyclopedias, including CalJur, as well as an index of cases that has some on-topic cases, though far fewer than were available for the federal law.

Part Two-Exercise of Discretion and Independent Judgment: The Wage Orders provide little guidance for this requirement, but Rutter cites to case law that provides more insight. Nordquist v. McGraw-Hill Broadcasting Co., 32 Cal. App.4th 555, 572 (5th Dist. 1995) notes that an "employee who merely applies his knowledge in following prescribed procedures is not exercising discretion and judgment of the independent sort."

DLSE also publishes an Enforcement Policies and Interpretations Manual that provides guidance on this and other areas, and their opinion letters are available by topic.

Regarding the effect of these publications, the DLSE website notes that "[p]ursuant to Executive Order S-2-03, the DLSE opinion letters and the Enforcement Policies and Interpretations Manual are currently under review to determine their legal force and effect and to ensure compliance with the requirements of the Administrative Procedures Act. Please note, in addition, that DLSE opinion letters are advice in specific cases only." The interpretations of an agency authorized by statute to interpret a law, however, are always persuasive.

Part Three-Monthly Salary: To qualify for the white collar exemptions, a worker's salary, however paid, must be at least double the minimum wage.

OTHER EXEMPTIONS

Several other exemptions are created by both Federal and California Law, many relate to specific industries. By scanning the chart and looking up the provisions cited in The Rutter Guide, I can quickly get a feel for whether any apply to our two hypothetical workers.

None apply to Summer, she is therefore fully covered by the provisions of both state and federal wage and hour law.

Gavin, however, may be exempt under one of the motor carrier exemptions. Both state and federal law exempt certain motor carriers from overtime provisions only because they are subject to the maximum hour provisions of the U.S. Department of Transportation.

The Wage Order Applicable to Gavin's Industry (Wage Order #9) ¶3(L) exempts from overtime provisions "any employees whose hours of service are regulated by:

(1) The United States Department of Transportation Code of Federal Regulations, Title 49, Sections 395.1 to 395.13, Hours

of Service of Drivers, or;

(2) Title 13 of the California Code of Regulations, subchapter 6.5, Section 1200 and the following sections, regulating hours

of drivers."

13 Cal. C.Regs §1200 applies to vehicles listed in Vehicle Code Sections 34500 and 34500.1 and their operation. Veh.C. §§ 34500.1 regulates tour buses. Gavin is therefore exempt from the overtime provisions of IWC Wage Order #9 and the FLSA.