Exempt vs. Non-Exempt
Adams Stirling PLC


Salaried Employees. Making an employee "salaried" does not necessarily exempt that employee from overtime pay.

  • the minimum salary must be no less than two times the state minimum wage for full-time employment

  • the employee's salary cannot be subject to reduction because of variations in the quality or quantity of the work performed

  • the employee must receive full salary regardless of the number of days or hours worked

Exempt from Overtime. There are various exemptions that allow for the classification of employees as "salaried-exempt", i.e., exempt from overtime.

1. Executive Exemption. This is applied to managerial employees who direct the work of two or more other employees, has the authority to hire and fire, exercises discretionary powers, etc. "Working managers" who perform the same work as the employees they supervise don't always qualify.

2. Administrative Exemption. This applies to employees whose jobs involve work directly related to management  and regularly exercises discretion and independent judgment. Examples include an administrative assistant who advises management, is involved in planning and negotiating, represents the company, analyzes business data, determines company and personal policies, etc. An employee who regularly performs routine clerical duties, makes deliveries, operates equipment, tabulates data, etc. would not qualify.

3. Professional Exemption. This classification applies to employees who are licensed or certified by California and are primarily engaged in the practice of law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting. 

Misclassification. The above provides general guidelines. With the exception of an onsite general manager, most association employees do not qualify as exempt from overtime. Because the penalties for misclassification can be significant, boards should seek legal counsel before classifying an employee as salaried-exempt.

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Adams Stirling PLC