Classified as ‘exempt’ or ‘salaried’? You may be entitled to back wages in Calif.

Allen Buckingham, and three other employees, worked as “Implementation Advisor” or “Client Fulfillment Consultants” for Bank of America, N.A. They were classified as exempt by their employer and paid a fixed monthly salary. They were not paid overtime, regardless of their hours worked, and they were not provided meal or rest breaks. The employees were treated as exempt under California’s administrative exemption because they dealt with the bank’s important corporate clients. They were also allowed to exercise more discretion and judgment than a mere service representative.   

However, the employees’ main tasks seem to be account setup, wiring funds and facilitating their corporate clients’ online banking activities. Buckingham and the other employees sued their employer in a class action alleging failure to pay overtime and premium pay for missed meal and rest breaks.

California employees are exempt from overtime pay only if they fall within very specific exemptions. One of these is the Administrative Exemption. For employees to fall under this exemption, they must be paid the monthly salary equivalent to no less than twice the state minimum wage. More importantly, their primary duties must involve administrative work. What does “administrative work” mean?

Courts have ruled that work is “administrative” when it is “directly related” to management policies or general business operations. “Directly related” means being “primarily engaged” in such work, and that the work is “qualitatively administrative.”

“Qualitatively administrative” means the employee’s work duties relate to the administrative operations of a business as distinguished from ‘production’ or ‘sales’ work. Production, sales, and customer service are duties that are not necessarily performed at the level of policy or general operations, and may merely be the day-to-day carrying out of the business’ affairs.

If an employee’s primary duties involve day-to-day tasks that are not directly related to management policies or general business operations, then these employees may simply be engaged in production work, not administrative work. If so, then they should be entitled to overtime pay for work beyond 8 hours per day or 40 hours per week.
Rather than proceed to trial, the parties agreed to settle the case upon payment of $6,600,000 to the class. Nearly 500 former and current bank employees will benefit from the settlement, which is estimated to provide an average of $10,000 to each class member.

“Salaried” employees who work a lot of unpaid overtime hours, and who have doubts that they are really doing management or administrative tasks, should ask themselves the following questions:

1. Is my main duty the management of the business or one of its departments?
2. Do I regularly direct the work of two or more employees?
3. Do I have authority to hire or fire other employees?
4. Do I regularly exercises discretion and independent judgment?
5. Do I earn a monthly salary equivalent to at least twice the state minimum wage for full-time employment?

If there is at least one “no” answer to the above questions, the employee would be smart to consult with a knowledgeable employment attorney to see if she or he is entitled to additional wages and other remedies. Misclassification cheats employees of their rightfully earned wages. Such wage theft should not be allowed to continue without redress.

The Law Offices of C. Joe Sayas, Jr. welcomes inquiries about this topic. All inquiries are confidential and at no-cost. You can contact the office at (818) 291-0088 or visit www.joesayaslaw.com or our Facebook page Joe Sayas Law. [C. Joe Sayas, Jr., Esq. is an experienced trial attorney who has successfully recovered wages and other monetary damages for thousands of employees and consumers. He was named Top Labor & Employment Attorney in California by the Daily Journal, consistently selected as Super Lawyer by the Los Angeles Magazine, and is the recipient of PABA’s Community Champion Award for 2016.]