Executive exemption's 'customarily and regularly' supervision requirement is a fact question, not a fixed percentage

STATE OF CALIFORNIA PETE WILSON, Governor

DEPARTMENT OF INDUSTRIAL RELATIONS
DIVISION OF LABOR STANDARDS ENFORCEMENT
LEGAL SECTION
455 Golden Gate Avenue, Room 3166
San Francisco, CA 94102
(415) 703-4150

H. THOMAS CADELL, JR., Chief Counsel

January 6, 1994

Jim W. Vogele, Esq.
Rudy & Zieff
530 Bush Street, Suite 500
San Francisco, CA 94108-3623

Paul R. Thornfeldt, Esq.
Ericksen, Arbuthnot, Brown,
Kilduff & Day, Inc.
20 California Street, Suite 300
San Francisco, CA 94111-7126

Re: Definition of "Customarily and Regularly" As That Term Is Used In Connection With The Time During Which An Employee Must Supervise Two Or More Employees In Order To Meet The Requirements for An Exemption As An Executive Employee

Gentlemen:

Having received two letters requesting the same information, I feel that it is most appropriate to answer the question posed in a joint letter.

The language contained in section 10.61(b) of the Division's Operations and Procedures Manual is taken directly from the language used in 29 C.F.R. §541.107. The federal regulations, of course, speak to the exercise of "discretion"; but the Division intended that the definition apply to the time during which an employee must supervise two or more employees in order to meet the requirements for an exemption as an executive employee under the California law.

As I explained to Mr. Thornfeldt when I spoke to him in a recent telephone conversation, I can think of no instance where the Division has been officially called upon to formulate or apply a "percentage" formula to the definition. It appears that the amplification on the definition which is contained at subd. (b) of §541.107 would make it clear that it is a factual inquiry which must be made. To paraphrase the Federal Regulations:

"The requirement will be met by the employee who normally and recurrently is called upon to [supervise two or more workers] in the day-to-day performance of his duties."

                                                                            1994.01.06

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Jim Vogele
Paul R. Thornfeldt
January 6, 1994
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As you know, the California law differs substantially from the federal law in the basic definition of the terms used. Unlike the federal regulations which look to the "primary duty"¹ of the employee, the IWC Orders emphasize the type of work the employee is "primarily engaged in." The IWC Orders define "primarily" to mean more than half the employee's work time.

The employee who devotes more than fifty percent of his or her time to supervision would almost certainly be supervising more than two employees on a regular basis. From a practical point of view, no employer could possibly afford the cost of supervision where the ratio is one to two. This is obviously the reason the Division has never been called upon to give a formal opinion or design a formula regarding the number of workers supervised.

I hope this is of assistance to you and the court. If either of you have any further questions please feel free to contact me.

Yours truly,

H. THOMAS CADELL, JR.
Chief Counsel

c.c. Victoria Bradshaw, State Labor Commissioner

¹This "primary duty" test has led to the absurd result reached in Donovan v. Burger King, 672 F.2d 1141, where the court essentially held that the assistant manager who devoted much of his day to frying hamburgers was still exempt because while frying hamburgers he was thinking about his supervisorial duties.