Amended
IN
Assembly
January 04, 2016 |
Amended
IN
Assembly
April 06, 2015 |
Introduced by Assembly Member Alejo (Coauthors: Assembly Members Brown, Daly, and Dodd) |
February 27, 2015 |
Existing law, with certain exceptions, establishes 8 hours as a day’s work and a 40-hour workweek, and requires payment of prescribed overtime compensation for additional hours worked. Existing law establishes the Division of Labor Standards Enforcement in the Department of Industrial Relations for the enforcement of labor laws, including overtime payment. Under existing law, a person who violates the provisions regulating work hours is guilty of a misdemeanor.
This bill would establish a rebuttable presumption that an employee is exempt from overtime pay
if the employee earns total gross annual compensation of at least $100,000 and regularly performs any of the exempt duties or responsibilities of an executive, administrative, or professional employee as set forth in the Industrial Welfare Commission Wage Orders. This bill, to rebut the presumption, would require evidence that the employee did not earn total gross annual compensation of at least $100,000, that the employee did not earn at least $1,000 per week, as specified, or that the employee did not regularly perform at least one exempt duty of an executive, administrative, or professional employee. This bill would only apply to an employee whose primary
duty includes office or nonmanual work, as described.
(a)There shall be a rebuttable presumption that an employee is exempt from Section 510 if the employee earns total gross annual compensation of at least one hundred thousand dollars ($100,000) and
also customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative, or professional employee as set forth in the Industrial Welfare Commission Wage Orders.
(b)(1)“Total gross annual compensation” shall include at least one thousand dollars ($1,000) per week paid on a salary or fee basis. Total gross annual compensation may also include commissions, nondiscretionary bonuses, and other nondiscretionary compensation earned during a 52-week period. Total gross annual compensation does not include board, lodging, and other facilities, and does not include payments for medical insurance, payments for life insurance, contributions to retirement plans, and the cost of other fringe benefits.
(2)If an employee’s total gross annual compensation does not meet the minimum amount established in subdivision (a) by the last pay period of the 52-week period, the employer may, during the last pay period or within one month after the end of the 52-week period, make one final payment sufficient to achieve the required total. If an employer fails to make that payment, this section shall not apply.
(3)An employee who does not work a full year for the employer, either because the employee is newly hired after the beginning of the year or ends the employment before the end of the year, is exempt from Section 510 pursuant to this section if the employee receives a pro rata portion of the minimum amount established in subdivision (a), based upon the number of weeks that the employee will be or has been employed. An employer may
make one final payment as described in paragraph (2) within one month after the end of employment, or this section shall not apply.
(4)The employer may utilize any 52-week period as the year, such as a calendar year, a fiscal year, or an anniversary of hire year. If the employer does not identify some other year period in advance, the calendar year will apply.
(c)The presumption created under subdivision (a) shall be rebutted only by evidence of one or more of the following:
(1)The employee did not earn total gross annual compensation of at least one hundred thousand dollars ($100,000).
(2)The employee did not earn at least one thousand dollars ($1,000) per week paid on a salary or fee basis.
(3)The employee did not customarily and regularly perform at least one exempt duty or
responsibility of an executive, administrative, or professional employee as set forth in the Industrial Welfare Commission Wage Orders.
(d)This section applies only to employees whose primary duty includes performing office or nonmanual work.
(e)(1)This section does not apply to nonmanagement production-line workers and nonmanagement employees in maintenance, construction, and similar occupations, such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, construction workers, laborers, and other employees who perform work involving repetitive operations with their hands, physical skill, and energy, regardless of the amount of their compensation.
(2)This section does not apply to an employee covered under a valid collective bargaining agreement that expressly provides for the wages, hours of work, and working conditions of employees, including premium wage rates for all overtime hours worked.