Certain employees are exempt from overtime pay, minimum wage, and meal and rest period requirements. The administrative exemption is commonly misapplied to employees who perform some type of administrative work, such as employees who work in human resources and accounting.
The administrative exemption only applies to employees whose monthly salary is at least two times the state minimum wage for full-time employment, and:
(a) Whose duties and responsibilities involve either:
(i) The performance of office or non-manual work directly related to management policies or general business operations of his/her employer or his/her employer’s customers; or
(ii) The performance of functions in the administration of a school system, or educational establishment or institution, or of a department or subdivision thereof, in work directly related to the academic instruction or training carried on therein; and
(b) Who customarily and regularly exercises discretion and independent judgment; and
(c) Who regularly and directly assists a proprietor, or an employee employed in a bona fide executive or administrative capacity (as such terms are defined for purposes of this section); or
(d) Who performs under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or
(e) Who executes under only general supervision special assignments and tasks; and
(f) Who is primarily engaged in duties that meet the test of the exemption . . . .
An employee’s job title is not determinative of his or her exempt status; whether an employee is exempt depends “’first and foremost’” upon what an employee actually does on the job (e.g., ‘work actually performed’)” and not on the particular job title of the employee. Mies v. Sephora U.S.A., Inc., 234 Cal. App. 4th 967, 978 (2015).
The following case is instructive as to the standard of what is considered as exercising “discretion and independent judgment”:
Discretion and independent judgment involves the comparison and evaluation of possible courses of conduct, and acting or making a decision after considering various possibilities. It implies that the employee has the power to make an independent choice free from immediate supervision and with respect to matters of significance. The decision may be in the form of a recommendation for action subject to the final authority of a superior, but the employee must have sufficient authority for the recommendations to affect matters of consequence to the business or its customers.
The most frequent cause of misapplication of the term ‘discretion and independent judgment’ is the failure to distinguish it from the use of skills and knowledge. An employee who merely applies his or her knowledge in following prescribed procedures or in determining which procedures to follow, or who determines whether specified standards are met . . . is not exercising discretion and judgment of the independent sort associated with administrative work. . . .
A second cause of the misapplication of the term ‘discretion and independent judgment’ involves employees who make decisions, but not at a level appropriate to administrative work. In some sense, almost every employee is required to use discretion: the shipping clerk may decide the method of packing, the truck driver decides the route, the bookkeeper decides which ledger to post first, but none of these decisions are important enough to count as part of an administrative function. Matters of consequence are those of real and substantial significance to the policies or general operations of the business of the employer or the employer's customers.
Nordquist v. McGraw-Hill Broadcasting Co., 32 Cal. App. 4th 555, 564 (1995).