Fixed Salary Nonexempt Employees are Entitled to Overtime Pay

By Corey Hanrahan

A lot of employers are either unaware of California’s labor laws, or know them and simply believe that they are above the law and cheat employees out of hard earned money. One way employers do this is by hiring employees into a fixed salary position (i.e. $24,000 per year) to avoid paying overtime compensation. However, if you are a fixed salary nonexempt employee, there is something you should know: You are still entitled to overtime pay — even if you agreed with the company that you were not!

“…However, if you are a fixed salary nonexempt employee, there is something you should know: You are still entitled to overtime pay…”

California Labor Code 515(d)(2) provides that notwithstanding a private agreement to the contrary, the payment of a fixed salary to a nonexempt employee represents compensation only for the employee’s regular, non-overtime hours.

Whether or not you are an exempt employee usually involves a detailed analysis of your job duties. While there are generally three applicable exemptions, each one requires the employer to set your salary at no less than twice the state’s minimum wage for full-time employment. As of the date of this post, the current California state minimum wage is $9.00 per hour. Therefore, to even be considered legitimately classified as an exempt employee, your annual salary would have to be at least $37,440. If it is not, and your employer put you in a fixed salary position, you are entitled to overtime compensation just like all of the hourly employees.

If you feel you are owed overtime wages by your employer, call Attorney Hanrahan at (619) 377-6522, or email him at corey@hanrahanfirm.com to set up a consultation.