In past blogs, we have mentioned the specific requirements for managers to be truly exempt from overtime pay. Managers—especially in retail settings—are told they are exempt from overtime pay because they receive a salary. However, in California, this alone is not sufficient for exemption.
Managers in California must spend at least 51% of their time carrying out their exempt duties, which includes independent business discretion or judgment. Unfortunately, employers confuse the difference between exercising skills or abilities and exercising independent discretion.
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Definition of Independent Discretion
What marks independent discretion is the ability to decide not only how you work, but how hard you work. This level of independence is unique to discretion. Applying skill still requires some measure of independence, but for most employees, they cannot decide how hard to work. Skill, especially in the context of high-level jobs, can be confused for discretion for this reason.
Difference between Independent Discretion & Skill
As an example of the difference between the two, let’s take a look at the difference between an art director and an illustrator. An art director is the drive behind the visual department of a publishing house, magazine, or any other kind of media production studio. They oversee artists, reject or accept submissions, and decide on the deadlines within their stable of assignments.
An illustrator, on the other hand, receives assignments from an art director. Illustrators each have skills unique to themselves. Each illustrator chooses how they work (their medium, their speed, etc.), where they work, and other factors related to art production. What they do not decide is their deadline. In the end, how hard they must work on a given assignment is dictated by the art director.
This is the difference between discretion and skill. Discretion decides the goals and standards that other employees must meet, thus dictating how hard other employees must work. Their exempt duties would revolve around making sure other employees meet those goals and standards. If an art director spent half his or her time making artwork, then they would cease to be exempt.
In the same way, if you as a manager spend most of your time conducting the duties that belong to your employees, you may not be exempt from overtime. You must spend over half of your time making sure your employees are utilizing their skills. If you are unsure of your role within your company, take a look at the above example. Are you an art director…or an artist?
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If you believe you have been wrongly deprived of overtime pay, contact my office for a free, no-obligation case evaluation. Together, we can determine your next step.