We have had many discussions with clients regarding exempt v. nonexempt Misclassification in this area has cost employers millions. Now, California employers litigating wage cases involving alleged misclassification of employees have a new and favorable published case in their arsenal. In Taylor v. United Parcel Service, Inc., a California Court of Appeal rejected a UPS supervisor’s claims that he was improperly classified as an exempt employee and should have instead been paid overtime and ensured meal and rest breaks. The court held, as a matter of law, that the employee qualified for both the administrative and executive exemptions from overtime laws. The court further held that the employee did not have sufficient evidence to support his claims to even warrant a trial on the issues.
The Taylor case contains a lot of good language on issues pertinent to the administrative and executive exemptions, including issues surrounding authority to hire and fire (as pertains to the executive exemption) and the administrative/production worker dichotomy (as pertains to the administrative exemption).
Although the Taylor case is a positive decision for California employers on exempt/non-exempt issues, employers are still cautioned to carefully review their exempt classifications because the wage and hour litigation flood continues in California.
UPS was required to demonstrate the following: (1) his duties and responsibilities involve management of the enterprise or a “customarily recognized department or subdivision thereof; (2) he customarily and regularly directs the work of two or more employees; (3) he has the authority to hire or terminate employees, or his suggestions as to hiring, firing, promotion or other changes in status are given “particular weight”; (4) he customarily and regularly exercises discretion and independent judgment; (5) he is primarily engaged in duties that meet the test of the exemption; and (6) his monthly salary is equivalent to no less than two times the state minimum wage for full-time employment. UPS were able to prove all of the above criteria.
Note: Don’t get confused with terminology. Salaried v. Hourly is the same as Exempt v. Nonexempt. If you have any doubts we can get you a form that has an easy formula to determine if an employee meets the exemption criteria.