Relevant Law Explaining Exempt and Non-Exempt Work

Below, find a synopsis of the relevant law which determines what type of work qualifies as exempt or non-exempt.

Wage and hour provisions apply to all employees in the State of California except those specifically exempted. Exemptions from wage and hour requirements are narrowly construed, and the burden is on the employer to show that an exception applies. Relevant here is the exemption for “professional employees,” specifically “artistic professionals.” An employer must meet both a “salary test” and a “duties test.”

1. The Salary Test.

“A salaried employee is compensated not for the amount of time spent on the job but rather for the general value of services performed.” Division of Labor Standards Enforcement ("DLSE") Manual § 51.6.3 (quotation omitted). A genuinely salaried employee “decide[s] for himself the number of hours to devote to a particular task.” DLSE Manual § 51.6.3.2. Based on these principles, a salaried employee “must receive the full contract salary for any week in which any work is performed without regard to the number of days or hours worked . . . .” DLSE Manual § 51.6.3.1. California law does “not permit a reduction in the salary of an exempt employee which is the result of a reduction in the number of hours in a workday or days in a workweek the employee is required to work.” DLSE Manual § 51.6.7. This applies even if the employee is off-site. So long as the employee has some work-related duties, pay for that day may not be deducted. DLSE Manual § 51.6.13.

Similarly, “an employee's predetermined pay [can]not be subject to reduction because of variations in the . . . quantity of work performed.” DLSE Manual § 51.6.3.2. Neither can it be pro-rated for part-time work. DLSE Manual § 51.6.3. So long as the employee is available to work, “deductions may not be made for the time when work is not available.” DLSE Manual § 51.6.14. Indeed, no deduction is permitted for a partial week of work “unless the employee voluntarily absents himself for personal reasons.” DLSE Manual § 51.6.1; see also § 51.6.14.3. Absences due to sickness or accident do not justify a reduction in pay. DLSE Manual § 51.6.15.2. Only where “no work is performed” during the entire work week may the employer withhold compensation. DLSE Manual §§ 51.6.1; 51.6.14.3; 51.6.3.1.

There are two pay practices in particular that may demonstrate that an employee's flat weekly pay rate does not constitute a bona fide salary. First, an employer may maintain detailed - if maybe inaccurate - time records for many employees that are classified as exempt. These records, especially if they document different rates of pay depending on the number of hours worked (i.e., overtime rates), could serve little purpose for the payment of truly salaried employees, whose compensation is based on services performed, not time spent at work.

Second, an employer may dock the pay of employees who worked only partial days or weeks for reasons other than the employees' personal, voluntary decision to take time off from work. An employer must pay an exempt employee an entire week's pay for any week in which the employee performed any work. Impermissible deductions therefore disqualify the employment from exempt status and trigger the overtime requirements of the California Labor Code.

2. The Duties Test.

In addition to meeting the “salary test,” an employer would have to meet the “duties test” to demonstrate that an employee is exempt. Labor Code § 515(a) provides an exemption for professional employees, provided: “the employee is primarily engaged in the duties that meet the test of the exemption, customarily and regularly exercises discretion and independent judgment in performing those duties, and earns a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.”

Wage Order 11 of the California Industrial Welfare Commission, which covers employees in the broadcast industry, further details the requirements for the duties test for artistic professional employees: an employee falls within this exemption if he or she “is primarily engaged in an occupation commonly recognized as a learned or artistic profession.” A “learned or artistic profession” is one where the employee is “primarily engaged” in the performance of:

  • “[w]ork requiring knowledge of an advanced type in a field . . . .,” or
  • “[w]ork that is original and creative in character . . . and the result of which depends primarily on the invention, imagination, or talent of the employee or work that is an essential part of or necessarily incident to any of the above work;” or
  • “Whose work is predominantly intellectual and varied in character (as opposed to routine mental, manual, mechanical, or physical work) and is of such character that the output produced or the result accomplished cannot be standardized in relation to a given period of time;” and
  • “Who customarily and regularly exercises discretion and independent judgment in the performance of [these] duties.”

Wage Order 11, § 1(A)(3)(b)-(c); see also DLSE Manual, § 54.8 through § 54.10.5.

Relevant federal regulations distinguish “the creative professions from work that depends primarily on intelligence, diligence, and accuracy.” 29 CFR § 541.302(c). Hence, not all television writers and editors are creative professionals under the regulation. The regulation describes the type of writer who would be exempt: “screen-play writers who choose their own subjects and hand in a finished piece of work to their employers (the majority of such persons are, of course, not employees but self-employed).” 29 CFR § 541.302(c). Court decisions suggest that an employee who is required to follow conventions or routine format in selecting stories, grouping related stories, and pacing broadcasts is not an artistic professional because he or she operates within accepted guidelines rather than relying on invention, imagination or talent in performing his or her job.

Moreover, many employees submit work to a producer who makes a final decision concerning the content of the employee's work, i.e., interview or episode outlines that were created pursuant to a routine format. Hence, rather than regularly exercising discretion and independent judgment concerning the content of their work, many employees actually revise content provided to them according to accepted formats and conventions. Where the latter is true, the employee may be entitled to overtime because he or she does not customarily and regularly exercise discretion and independent judgment in the performance of his or her duties.

Also, see the California Division of Labor Standards Enforcement (DLSE) Manual where the relevant law citations are taken from.