The executive label belongs to any employee:
- Whose duties and responsibilities involve the management of the enterprise in which he or she is employed or of a customarily recognized department or subdivision of that enterprise;
- Who customarily and regularly directs the work of two or more other employees in that enterprise;
- Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees will be given particular weight;
- Who customarily and regularly exercises discretionary powers; and
- Who is primarily engaged in duties that meet the test of the exemption. 8 Cal Code Regs §11010(1)(B)(1).
The "Executive" duties typically involve principal figures of the business. The top manager of a store very often qualifies for the exemption, and the label would likely also apply to a corporate executive officer. However, the executive duties are not limited to a single individual in a company, and so other managers, officers, or employees with similar duties may also qualify.
If the employee has genuine executive duties, he probably also meets the salary requirement. Regardless, the employee must meet both in order to reach the overtime exemption. If he meets the overtime exemption, then he will be able to work above forty hours in a given workweek and the company will not have to pay him overtime compensation.
For the employee in question to qualify, the employee must be "primarily engaged" in the above listed sorts of duties. If the employee only occasionally manages the enterprise, or only rarely makes personnel decisions such as those involving the hiring and firing of workers, et cetera, the employee will not qualify for the exemption. Much attention should be paid to the frequency at which the employee engages in such activities, and probably more so should be paid to the amount of time the employee spends in a given timeframe on such activities.
In addition, "highly compensated employees" (who otherwise would not qualify for the executive, administrative, or professional duties exemptions) are also exempt if they earn $100,000 or more per year and frequently perform an executive duty. 29 CFR §541.601.
The classification of a worker is not determined by title but instead is determined by both salary and duties. Thus, it is irrelevant if a nonexempt employee agrees to work overtime without additional compensation; additional compensation would be required by California law. Factors for determining whether an executive duty is the employee's "primary" duty include:
- The relative importance of the exempt duties as compared with other types of duties;
- The amount of time spent performing exempt work;
- The employee's relative freedom from direct supervision; and
- The relationship between the employee's salary and the wages paid to other employees for the kind of nonexempt work performed by the employee. 29 CFR §541.700(a).
If you and other employees have not been granted proper overtime wages, or if you have been denied rest periods or meal breaks or have been compelled to work during them, contact the trusted attorneys for overtime compensation and rest or meal breaks at Kokozian Law Firm, APC. 323-857-5900. Ask about our free initial consultation.