Certain Employees Are Exempt from Overtime Pay and Wage & Hour Laws

Certain groups of employees are completely exempt from some of the basic protections of state and federal wage and hour laws, which means the employee has no right to minimum wage, overtime, or rest and meal breaks.

Outside Salespeople. Outside salespeople are exempt from California law regarding wages, hours and working conditions as well overtime and minimum wage. An outside salesperson, under California law, is an employee who spends more than half of his time away from his employer's place of business selling items or obtaining orders. An employee is not categorized as an outside salesperson if he spends more than 50% of his work time engaged in non-exempt duties such as delivering goods or stocking shelves. In contrast, under federal law, an outside salesperson is defined as someone whose primary function is outside sales work and includes "incidental" tasks such as making deliveries to be exempt work.

Charitable, Non-profit or Religious Organizations. In general, charitable, non-profit or religious organizations are covered by California wage and hour laws. Under federal law, if the primary activity of the organization is charitable, educational, or religious, then the organization is not a covered entity and does not have to comply with federal wage and hour law. However, if the charity or non-profit organization runs a commercial venture, then the commercial entity must comply with the wage and hour laws. Finally, persons who volunteer for a charity or non-profit organization are not covered under either state or federal law.

Relatives. Only immediate family members of the employer are exempt from California wage and hour laws. So this "exempt" group includes parents, spouses and children of the business owner, but does not include cousins, grandparents, in-laws, or brother/sisters of the employer. Under federal law, relatives are exempt from coverage if all of the business's employees are related, in other words, the regular employees must be the owner's parent, spouse, children, siblings, grandchildren, grandparents or in-laws.