California Labor Code 515 LC is the state’s “administrative exemption.” It excludes the majority of white-collar workers from receiving time-and-a-half pay when they work overtime hours.
The entirety of the statute text reads as follows:
LC 515. (a) The Industrial Welfare Commission may establish exemptions from the requirement that an overtime rate of compensation be paid pursuant to Sections 510 and 511 for executive, administrative, and professional employees, if the employee is primarily engaged in the duties that meet the test of the exemption, customarily and regularly exercises discretion and independent judgment in performing those duties, and earns a monthly salary equivalent to no less than two times the state minimum wage for full-time employment. The commission shall conduct a review of the duties that meet the test of the exemption. The commission may, based upon this review, convene a public hearing to adopt or modify regulations at that hearing pertaining to duties that meet the test of the exemption without convening wage boards. Any hearing conducted pursuant to this subdivision shall be concluded not later than July 1, 2000.
(b) Except as otherwise provided in this section and in subdivision (g) of Section 511, nothing in this section requires the commission to alter an exemption from provisions regulating hours of work that was contained in a valid wage order in effect in 1997. Except as otherwise provided in this division, the commission may review, retain, or eliminate an exemption from provisions regulating hours of work that was contained in a valid wage order in effect in 1997.
(c) For the purposes of subdivision (a), “full-time employment” means employment in which an employee is employed for 40 hours per week.
(d)(1) For the purpose of computing the overtime rate of compensation required to be paid to a nonexempt full-time salaried employee, the employee’s regular hourly rate shall be 1/40th of the employee’s weekly salary.
(2) Payment of a fixed salary to a nonexempt employee shall be deemed to provide compensation only for the employee’s regular, nonovertime hours, notwithstanding any private agreement to the contrary.
(e) For the purposes of this section, “primarily” means more than one-half of the employee’s worktime.
(f)(1) In addition to the requirements of subdivision (a), a registered nurse employed to engage in the practice of nursing shall not be exempted from coverage under the orders of the Industrial Welfare Commission, unless he or she individually meets the criteria for exemptions established for executive or administrative employees.
(2) This subdivision does not apply to any of the following:
(A) A certified nurse midwife who is primarily engaged in performing duties for which certification is required pursuant to Article 2.5 (commencing with Section 2746) of Chapter 6 of Division 2 of the Business and Professions Code.
(B) A certified nurse anesthetist who is primarily engaged in performing duties for which certification is required pursuant to Article 7 (commencing with Section 2825) of Chapter 6 of Division 2 of the Business and Professions Code.
(C) A certified nurse practitioner who is primarily engaged in performing duties for which certification is required pursuant to Article 8 (commencing with Section 2834) of Chapter 6 of Division 2 of the Business and Professions Code.
(D) Nothing in this paragraph shall exempt the occupations set forth in subparagraphs (A), (B), and (C) from meeting the requirements of subdivision (a).
Legal Analysis
California Labor Code 515 LC sets out California’s “administrative exemption” to overtime pay laws. This is also called the:
- executive exemption, or
- professional exemption
Under LC 515, employees are not eligible for time-and-a-half overtime wages if they:
- are primarily doing office, non-manual work;
- regularly exercise their discretion and independent judgment when performing their job duties; and
- earn a monthly salary no less than double California’s minimum wage for full-time employment.
Example: Jeffrey earns $100,000 a year as an attorney. He often sleeps at the office because of his 80-hour workweek. But because he’s an exempt worker under the “administrative exemption”, he is not entitled to time-and-a-half overtime pay.
LC 515 also specifies four types of registered nurses who are not entitled to overtime benefits under the administrative exemption:
- nurses that meet the three criteria listed above;
- certified nurse midwives;
- certified nurse practitioners; and
- certified nurse anesthetists1
In sum, white-collar workers are generally not entitled to overtime benefits under the “administrative exemption.”
In general, white-collar workers are exempt from time-and-a-half overtime pay under LC 515.
See our related article on California overtime exemptions: exempt vs. non-exempt employees.
Legal References
- California Labor Code 515 LC – Overtime exemption; Overtime rate of compensation; Applicability. See also: Kao v. Holiday (Cal. App. 1st Dist., 2017), 219 Cal. Rptr. 3d 580, 12 Cal. App. 5th 947; Safeway Wage & Hour Cases (Cal. App. 2d Dist. Dec. 18, 2019) 256 Cal. Rptr. 3d 882.