Exempt Vs Non Exempt Employees

Introduction This brief discussion and critique focuses on the nature of exempt and non-exempt employees and how the different categorizations change the way in which they are compensated for the work they perform. Not only will I explain the difference between the two different categories, I’ll also examine a case in California where the definition of these two categories was in question. Specifically, the difference between a state definition and a federal definition of the way exempt and non-exempt employees are defined. In the end I’ll show how the case in California was decided upon and how that issue was resolved.
Exempt vs. Non-Exempt Employees To fully understand how different employees are compensated under the current laws,
The first part of this time he performed duties as a route sales representative. His duties in this position included delivering bottled water to the residences and other customers on his daily route. In an average day he would deliver between 150 and 190 bottles refilling and replacing supplies, rotate stock on his delivery truck inspecting bottles for contaminants and leaks (Cal: Supreme Court, 1999). He would also perform minor water cooler maintenance at locations where they were accessible. According to what Ramirez told the court, he spent very little time performing any sales or solicitation activities while on his normal route. His normal customer contact was mainly done by notes or calls from the customer to ask for additional services. In his testimony he stated he was responsible to obtain one new customer per day and in doing so he was required to make 10 face-to-face contacts with potential customers. Given his interpretation of what his daily tasks entailed, Ramirez considered his position as not of an “outside salesperson”. Under FLSA an individual who is considered outside sales staff are automatically exempt employees who are not entitled to an overtime wage (Cal: Supreme Court,
Ramirez spent around 90% of his week in sales activities outside the company property. In the end, the court found in favor of Yosemite Water and decided that Mr. Ramirez was an outside sales employee who was not entitled to an overtime wage for extra hours worked. The conclusion of this case caused contention with how the letter of the law is read by the parties involved. Yosemite Water read the California Industrial Welfare Commission (IWC) wage order no. 7-80, 2(I) that an outside sales employee spend more than half of his time away from the company engaged in sales activity. Ramirez contended that the court should look at the IWC’s wage order as a way to take the aggregate of his time engaged in sales versus the time spent in delivering the bottles and cooler repair to determine the total sum. Yosemite disagreed and stated the court should look to Federal law which states an employee’s status is determined by his primary duty performed which the court also determined was as an outside sales