The Non-Exempt Executive Director

Many employers commonly believe that an employee with a job title of executive director or something similar whom performs primarily managerial, discretionary tasks, is exempt from overtime payment.  This is, however, not always the case.  California law has many additional requirements in order for an employee to meet the test of the executive exemption other than job title and responsibilities.  Specifically, California Code of Regulations, Title 8, section 11040 requires that (1) the duties of the employee include the management of the enterprise; (2) the employee “customarily and regularly” directs the work of two or more full time employees; (3) the employee has a the authority to hire and fire; (4) the employee exercises “discretion and independent judgment”; (5) the employee is primarily engaged in activities that meet the test of exemption; and (6) the employee must earn a weekly salary no less than two times the state minimum wage.  The two areas employers frequently miss are the requirement that the employee directs at least two full time employees, and the requirement that the employee make more than the two times the weekly salary of the state minimum wage.  If any of the requirements are not met, the employee is not exempt, and must be paid hourly.  If an employer incorrectly treats an employee as exempt, the employer could be required to pay all overtime owed going back to a certain point, and also potentially face payment of liquidated damages under Labor Code section 1194.2.

Contact Collin M. Bogener regarding your employment related matters.