In an earlier article I discussed the “Executive” exemption from overtime and meal & rest periods, also known as “Managerial” exemption. In this article, I will talk about the “Administrative” exemption from overtime and meal & rest periods requirements.
In determining who is an “administrative employee” and thus exempt from state overtime pay, minimum wage, and meal & rest periods requirements, the following test applies:
- The employee must be “primarily” engaged (more than 50% of work time;
- In duties that meet the “test of the exemption”, see below;
- Customarily and regularly exercise discretion and independent judgment; and
- Earn a monthly salary equal to at least twice the minimum wage for full-time employment ( Eicher v. Advanced Business Integrators, Inc. (2007) 151 CA4th 1363, 1372, 61 CR3d 114, 118 see Lab.C. § 515 (a)(e).
“Administrative” vs. “production” duties: “Administrative employees” are those whose primary duties are directly related to management policies or general business operations of the employer or its customers, as distinguished from “production employees” whose primary duty is producing the goods or services that the employer produces. (Bell v. Farmers Ins. Exch. (2001) 87 CA 4th 805, Nordquist v. McGraw–Hill Broadcasting Co. (1995) 32 CA4th 555.)
An insurance company’s claims representatives who handled auto and homeowner insurance claims were “production” employees (thus entitled to overtime pay) because claims adjusting was the employer’s business and their authority was limited to routine claims. (Bell v. Farmers Ins. Exch., supra, 87 CA 4th at 825.)
A consultant working for a software company whose primary duty was to provide customer service and training for customers’ employees was a nonexempt “production” worker (entitled to overtime pay). His work was part of the employer’s core, day-to-day operations rather than management or policymaking. (Eicher v. Advanced Business Integrators, Inc. (2007) 151 CA 4th 1363.)
Compare: An employee who spent most of his work time maintaining a data network essential to his employer’s business was properly classified as an “administrative” employee, exempt from overtime pay requirements.
If you have any question about the “Administrative” Exemption or if you would like to know whether you are properly classified as exempt employee from the overtime, minimum wage, and meal & rest breaks requirements, please feel free to contact my san diego labor and employment law office. My san diego labor and employment law firm will offer you a free consultation.