federal salary basis test in California

2014Union, Local 250 v. Colcord (2008) 160 Cal.App.4th 362, 370, fn. 5 [ 72 Cal.Rptr.3d 763 ].) 6 Throughout her argument, Rhea accordingly endorses the wording and structure of the federal salary basis test as relevant to the rules applicable in California, but she contends that certain provisions of California law require that the federal salary basis test be applied more protectively when it is imported into California law.

2014Union, Local 250 v. Colcord (2008) 160 Cal.App.4th 362, 370, fn. 5 [ 72 Cal.Rptr.3d 763 ].) 6 Throughout her argument, Rhea accordingly endorses the wording and structure of the federal salary basis test as relevant to the rules applicable in California, but she contends that certain provisions of California law require that the federal salary basis test be applied more protectively when it is imported into California law.

2014Employees (2003) 148 Wn.2d 383, 401 [ 60 P.3d 1183, 1192 ].) Apart from demonstrating that state law may diverge from the federal salary basis test, Washington’s approach is not relevant here because it is based on a different underlying state law. 7 “The DLSE’s opinion letters, ‘ “ “while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance.” ’ ” ’ ” (Brinker, supra, 53 Cal.4th at p. 1029, fn. 11 .) 8 Labor Code section 227.3 provides in relevant part: “Unless other

2013(Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1028 [ 139 Cal.Rptr.3d 315 , 273 P.3d 513 ].) Accordingly, we turn to federal law for the definition of “salary.” The federal salary-basis test is found in the regulations implementing the Fair Labor Standards Act of 1938. ( 29 U.S.C. § 201 et seq.) Those regulations explain that, in order to be exempt from the federal overtime pay requirement, an administrative employee must be engaged in specified administrative job duties and be paid on a “salary or fee basis.” ( 29 C.F.R. § 541.200 (a)(1) (2012).) An employee is paid on a

2008(Tidewater Marine Western, Inc. v. Bradshaw (1996) 14 Cal.4th 557, 561-562 [ 59 Cal.Rptr.2d 186 , 927 P.2d 296 ].) To a substantial degree, the DLSE has followed the federal salary basis test.

2008(Tidewater Marine Western, Inc. v. Bradshaw (1996) 14 Cal.4th 557, 561-562 [ 59 Cal.Rptr.2d 186 , 927 P.2d 296 ].) To a substantial degree, the DLSE has followed the federal salary basis test.

2020(See Negri, supra, 216 Cal.App.4th at pp. 397-398; Kettenring v. Los Angeles Unified School Dist. (2008) 167 Cal.App.4th 507, 513 (Kettenring).) Those regulations explain that to be exempt from the federal overtime pay requirement, an administrative employee must be engaged in specified administrative job duties and be paid on a “salary or fee basis.” ( 29 C.F.R. § 541.200 (a)(1) (2019).) 3 Defining salary as “a fixed rate of pay” makes sense to us since “salaried employees are paid for the general value of their services rather than the precise amount of time spent on the job.” (Simmons, Wage

2020A salary is generally understood to be a fixed rate of pay as distinguished from an hourly wage.” (Negri, supra, 216 Cal.App.4th at p. 397 [compensation plan based on number of hours worked, with no guaranteed minimum, is not a “salary” under 3 Wage Order 4’s administrative exemption].) California courts follow the federal salary basis test to a substantial degree and look to the federal regulations implementing the Fair Labor Standards Act ( 29 U.S.C. § 201 et seq.) (the FLSA) for guidance in interpreting the salary basis test.

2020(See Negri, supra, 216 Cal.App.4th at pp. 397-398; Kettenring v. Los Angeles Unified School Dist. (2008) 167 Cal.App.4th 507, 513 (Kettenring).) Those regulations explain that to be exempt from the federal overtime pay requirement, an administrative employee must be engaged in specified administrative job duties and be paid on a “salary or fee basis.” ( 29 C.F.R. § 541.200 (a)(1) (2019).) 3 Defining salary as “a fixed rate of pay” makes sense to us since “salaried employees are paid for the general value of their services rather than the precise amount of time spent on the job.” (Simmons, Wage

2020(See also Schwind v. EW & Associates, Inc. (2005) 357 F.Supp.2d 691, 703 [observing without discussion that administrative “exemption is unavailable to defendants because plaintiff was not paid on a salary basis and received only commissions”].) Since “California follows the federal salary basis test to a substantial degree” (Kettenring, supra, 167 Cal.App.4th at p. 513 ), a commissions-only compensation plan cannot pass California’s salary basis test. 4 The issue presented here is not whether paying a base salary of at least twice the minimum wage, plus commissions, satisfies the salary basis

2020(See also Schwind v. EW & Associates, Inc. (2005) 357 F.Supp.2d 691, 703 [observing without discussion that administrative “exemption is unavailable to defendants because plaintiff was not paid on a salary basis and received only commissions”].) Since “California follows the federal salary basis test to a substantial degree” (Kettenring, supra, 167 Cal.App.4th at p. 513 ), a commissions-only compensation plan cannot pass California’s salary basis test. 4 The issue presented here is not whether paying a base salary of at least twice the minimum wage, plus commissions, satisfies the salary basis

2020(See also Schwind v. EW & Associates, Inc. (2005) 357 F.Supp.2d 691, 703 [observing without discussion that administrative “exemption is unavailable to defendants because plaintiff was not paid on a salary basis and received only commissions”].) Since “California follows the federal salary basis test to a substantial degree” (Kettenring, supra, 167 Cal.App.4th at p. 513 ), a commissions-only compensation plan cannot pass California’s salary basis test. 4 The issue presented here is not whether paying a base salary of at least twice the minimum wage, plus commissions, satisfies the salary basis

2014Employees (2003) 148 Wn.2d 383, 401 [ 60 P.3d 1183, 1192 ].) Apart from demonstrating that state law may diverge from the federal salary basis test, Washington’s approach is not relevant here because it is based on a different underlying state law. 7 “The DLSE’s opinion letters, ‘ “ “while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance.” ’ ” ’ ” (Brinker, supra, 53 Cal.4th at p. 1029, fn. 11 .) 8 Labor Code section 227.3 provides in relevant part: “Unless other

2008In a March 1, 2002 opinion letter, the DLSE stated that “ ‘[t]he deductions from salaries allowed under [the pre-2004 federal salary basis regulation] also are permitted under state law . . . .’ ” (Samuel v. ADVO, Inc. (2007) 155 Cal.App.4th 1099, 1109 [ 66 Cal.Rptr.3d 622 ].) 6 We note parenthetically that for a substantial part of the time in issue Colcord was not in fact performing any work for Local 250 but was on sick leave.

2008In a March 1, 2002 opinion letter, the DLSE stated that “ ‘[t]he deductions from salaries allowed under [the pre-2004 federal salary basis regulation] also are permitted under state law . . . .’ ” (Samuel v. ADVO, Inc. (2007) 155 Cal.App.4th 1099, 1109 [ 66 Cal.Rptr.3d 622 ].) 6 We note parenthetically that for a substantial part of the time in issue Colcord was not in fact performing any work for Local 250 but was on sick leave.

2007(See Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575, 581-582 [ 94 Cal.Rptr.2d 3 , 995 P.2d 139 ].) In our view, ADVO’s disability plan was a bona fide plan under both the federal salary basis test and state law.

2007(See Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575, 581-582 [ 94 Cal.Rptr.2d 3 , 995 P.2d 139 ].) In our view, ADVO’s disability plan was a bona fide plan under both the federal salary basis test and state law.