In today’s post, we’ll be continuing a discussion we started in early December. Silicon Valley is the land of start-ups, but founding a new business is not always a smooth process. Even if you strive to treat your new employees well, it is not always easy to be in full compliance with state and federal employment laws.

As just one example, do you know the difference between an exempt and non-exempt employee? We’ll discuss a bit more about this issue in today’s post.

First of all, what are employees exempt from? Exempt and non-exempt status refers to California’s laws governing overtime pay. Workers who are exempt from these laws do not need to be paid (or paid at a higher rate) for overtime work, whereas non-exempt workers do.

Many believe that job title is a determining factor in E/NE status, but that’s not necessarily the case. Instead, a given employee’s actual work duties determine whether or not he is exempt or non-exempt.

An employee’s wages are also a consideration in status. In California, employees who work full time must generally earn (per month) no less than twice the state minimum wage if they are to be considered exempt. It should also be noted that being paid a salary vs. an hourly wage is not a determining factor in E/NE status.

What we covered in today’s post is just a broad overview of an employment law topic that can be tricky. If you want to learn more, online resources are available. But in order to make sure your business is in compliance with this and other laws, you may want to consult an experienced employment law attorney.