California Labor Code 515 Overview & Examples
Legally reviewed by: Jessica Anvar Stotz, JD, MBA
California Labor Code 515 covers employees that are exceptions to the normal overtime labor laws in California. It mainly exempts executive, administrative, and professional employees who meet certain criteria that will be expanded below.
California Labor Code 515 Explained in 90 Seconds
As mentioned, California Labor Code 515 exempts certain employees from receiving overtime payment if the Industrial Welfare Commission decides to exempt them. These employees are executive, administrative, and professional employees who primarily perform work that meet the established criteria for exemption, who normally exercise discretion and independent judgment in that work, and who earn a monthly salary of at least double the states’ minimum wage. The statute clarifies that “primarily” for these employees means “more than half of an employee’s worktime.”
Essentially, California Labor Code 515 allows the Industrial Labor Commission to create overtime pay exceptions for particular employees who meet the requirements to be exempted.
It is also worth noting that nurse midwives, nurse anesthetists, and nurse practitioners are not covered by this Labor Code.
Understanding Overtime Pay
Overtime pay is “extra” wages that employees earn when they work more than the standard workweek, which is typically 40 hours. When an employee works more than 40 hours a week, California law requires that they are paid overtime. When employees work more than 8 hours in a day, California law sets the hourly rate at every hour after the 8th at 1.5x what it normally is. For example, someone making $15/hour makes $22.5/hour during an overtime hour (15 x 1.5 = 22.5). Employees who work more than twelve hours in a single workday receive double pay for every hour worked beyond the twelfth and double pay on every hour past the eighth if they have worked the last seven days consecutively.
The Exemption Established by Labor Code 515
Labor Code 515 establishes an overtime exception for certain employees, namely those that perform administrative, executive, or professional work. They must perform this work with some significant and repeated degree of independent judgment and earn a monthly salary of at least twice the minimum wage of the state they are in (here, California). It is important to note that these employees are not automatically exempt from overtime because Labor Code 515 exists. Labor Code 515 only allows the Industrial Welfare Commission to establish exemptions if it sees fit but does not on its own exempt these employees from earning overtime.
As already mentioned, the potentially exempt employees are those who perform executive, administrative, or professional work and who meet the two other criteria regarding discretion and independence and a salary threshold. Below are more specific breakdowns of each category.
Performs Executive, Administrative, or Professional Work: The type of work covered by California Labor Code 515 can be summarized as “white collar” work. People like attorneys, doctors, accountants, and so forth are eligible to be exempt from receiving overtime pay under Labor Code 515.
Has Discretion and Independent Judgment: This is also largely covered by the “white collar” description. Positions like cashiers, waiters, security guards, and more work under another organization are responsible for some specific duty within which they have little discretion. Exempt employees, on the other hand, do more individual work like a private school teacher or an attorney who works in a small firm.
Makes 2x Minimum Wage: Likely the most straightforward to understand, an employee who meets the other two criteria and makes 2x the minimum wage as a salary is eligible to be exempt from overtime payments. The minimum wage in California is currently $16, so 2x the minimum wage is $32. As a yearly salary for 40-hour work weeks, that amount is $66,560, meaning an employee who meets the other criteria and makes $66,560 or more can be exempt from overtime.
What are “Exempt Duties” under Labor Code 515?
“Exempt duties” are those which might make someone a worker exempt from receiving overtime payments under California Labor Law 515. They include:
Executive Duties: Things that involve management of a business or department, such as supervising employees or coming up with schedules and timesheets. Such employees likely also make significant independent judgments in their day-to-day duties. An example of such an employee would be a general manager at a restaurant.
Administrative Duties: Work that supports executives and their work by performing office and business operation tasks is considered administrative and can also be exempt. An example of work like this might be a secretary which handles the emails of an executive, or one who schedules meetings and events for said executive.
Professional Duties: Duties which involve the application of specialized knowledge, typically requiring advanced education or training, are considered professional duties. Doctors and lawyers are classic examples of professional workers, as their careers require advanced training and involve applying the information gained from that training in a specialized way.
Important Considerations: Misclassification and Your Rights
Unfortunately, all employees should be aware that employers can intentionally or unintentionally misclassify their employees and thereby render them unable to receive overtime payments. In the event that you are misclassified as an exempt employee, it is in your best interest to file a claim with the California Division of Labor Standards Enforcement, or DLSE. Being properly classified is a very important element of being an employee, as overtime payments can be significant and missing them when they should be earned is improper business conduct on the part of the employer.
Example Scenarios
Example 1: Exempt Employee Claims Overtime Payments
- Scenario: An attorney working for a small firm works an 80-hour work week in order to finish a case he is working on. After he finishes, he demands to be paid overtime for the hours that went beyond his 40-hour week.
- Violation: Professional employees are exempt from overtime payments.
- How Labor Code 515 Applies: As a professional employee, an attorney is exempt from overtime payments under Labor Code 515. An attorney operates with a great degree of independence and discretion, likely makes more than 2x the minimum wage, and deploys advanced skills that require specialized training to receive.
Example 2: Nonexempt Employee Misclassified by Employer
- Scenario: A waitress at a pizza restaurant begins working and works ten hours of overtime in a week. On the next payday, she notices the overtime hours were not counted as overtime. She approaches her manager about it, who claims she is exempt beceause she exercises discretion in how she carries the pizzas to the tables.
- Violation: Misclassification of employee as exempt.
- How Labor Code 515 Applies: Waitresses, generally speaking, are not within the groups of employees that are exempt from receiving overtime payments under Labor Code 515. They do not perform executive, administrative, or professional work and exercise limited judgment with respect to their duties. In this case, the waitress was misclassified by her employer and should file a wage claim with the DLSE.
Example 3: Exempt Employee Improperly Paid Overtime
- Scenario: A secretary for an executive of a large company making over 2x the minimum wage works several hours of overtime in a week catching up with emails and memos left for the executive. She is paid overtime for these hours.
- Violation: Exempt employee improperly received overtime payments.
- How Labor Code 515 Applies: An employee like the secretary in this case would likely be exempt from overtime payment because her work is administrative in nature, requires some degree of discretion, and because she makes more than 2x the minimum wage.
Important Note: These are just a few examples, and Labor Code 515 covers a wide range of potentially-exempt employees. Employees with specific questions should consult with an employment attorney to understand their rights under the law.
Keeping Track of Your Hours and Leave
An effective strategy for avoiding overtime payment complications between you and your employer is to keep track of your hours and leave to the best of your ability. By being aware of the payment they should be receiving, employees can better catch when they are not receiving the payment they have earned. Similarly, knowing what type of employee you are and whether or not you are exempt can help you make decisions regarding how much to work in a given week.
Resources for Employees and Employers
- California Labor Code 515
- California Department of Industrial Relations
- California Department of Industrial Relations – Division of Labor Standards Enforcement
- California Department of Industrial Relations – Division of Labor Standards Enforcement: Overtime
- California Department of Industrial Relations – Division of Labor Standards: How to File a Wage Claim
Connect with an Attorney
California’s labor laws exist to protect employees from abuse by their employer and to keep employees aware of their rights. California Labor Code 515 specifically involves overtime payments, which can be of vital importance to employees, especially when they are earned but not paid. Worse, an employee could be misclassified as exempt from receiving overtime when they actually are not.
If you find yourself in such a situation, the best thing to do is to contact LawLinq. LawLinq is a California State Bar Certified Lawyer Referral Service that will connect you with an experienced employment attorney who can help you win your case. If you have been wronged by your employer, you deserve representation: contact us today by calling (855) 997-2588 or by filling out an online form to be connected with an attorney!
