On August 4, 2025, in Hirdman v. Charter Communications, a Court of Appeal of California agreed with the trial court that outside salespeople qualify as “exempt” employees under California Labor Code section 246(l)(3) and, therefore, can be paid “in the same manner as the employer calculates wages for other forms of paid leave time” when they use paid leave under the Healthy Workplaces Healthy Families Act (HWHFA), California’s statewide paid sick and safe time law.
The decision is notable because it takes a more expansive view of “exempt” than does the Division of Labor Standards Enforcement (DLSE), which, in an October 11, 2016 opinion letter, concluded that the term was limited to executive, administrative, and professional (EAP) employees, like in the HWHFA’s accrual presumption provision, California Labor Code section 246(b)(2).
In concluding that the definition of “exempt” was not as limited as the DLSE (and plaintiff’s counsel) argued, the court observed that “California courts [] consistently use the phrase ‘exempt employees’ in the private employment context to mean those not entitled to overtime wages under California wage and hour law.” Considering “exempt” a “term of art,” the panel next found that the legislature knew what it was doing when, in the rate of pay context, it did not limit its scope to only EAP employees:
Notably, the Legislature did carve out precisely such a limitation in a different subdivision of the same section—section 246, subdivision...
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