Labor Code §515 – Exempt Employee Salary & Duties Tests

California Labor Code §515 allows an employer to treat an executive, administrative or professional employee as exempt from overtime only if the employee is primarily engaged in exempt duties, customarily and regularly exercises discretion and independent judgment, and earns a monthly salary of at least twice the state minimum wage for full-time work, which is $70,304 a year in 2026. If any one of those requirements is missing, the employee is non-exempt and is owed overtime and meal and rest breaks.

Misclassification is one of the costliest wage mistakes. An “assistant manager” paid $65,000 a year who regularly works 50 hours a week is below the 2026 salary floor, so he is non-exempt no matter what his job title says. His unpaid overtime alone can come to more than $20,000 a year, as the example below shows.

This page explains the text of §515, the salary test and the duties tests, the special rule for registered nurses, who else is excluded, remedies, deadlines and where to file. For a practical checklist, see our article on whether you are misclassified as exempt.

What Labor Code §515 says

• Subdivision (a) lets the Industrial Welfare Commission (IWC) exempt executive, administrative and professional employees from the overtime requirements of §§510 and 511, but only if the employee (1) is “primarily engaged in the duties that meet the test of the exemption,” (2) “customarily and regularly exercises discretion and independent judgment” in those duties, and (3) “earns a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.”
• Subdivision (b) preserves other hours exemptions that existed in the 1997 Wage Orders, subject to IWC review.
• Subdivision (c) defines “full-time employment” as 40 hours a week.
• Subdivision (d) sets the overtime rate for salaried non-exempt workers: the regular hourly rate is 1/40th of the weekly salary, and a fixed salary covers only regular, non-overtime hours.
• Subdivision (e) defines “primarily” as “more than one-half of the employee’s worktime.”
• Subdivision (f) limits the professional exemption for registered nurses.

By the numbers$70,304

The salary test: $70,304 in 2026

The salary floor is tied to the state minimum wage, not to any higher city or county rate. The math is 2 × the state minimum wage × 2,080 hours (40 hours × 52 weeks).

Year	State minimum wage	Minimum annual salary	Monthly	Weekly
2026	$16.90	$70,304	$5,858.67	$1,352.00
2027	$17.40	$72,384	$6,032.00	$1,392.00

The Wage Orders repeat the same requirement for each white-collar exemption: the employee “must also earn a monthly salary equivalent to no less than two (2) times the state minimum wage for full-time employment.” For the history of the threshold and what changes in 2027, see our page on the California exempt salary threshold.

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The duties tests in the Wage Orders

Section 515 sets the framework. The detailed duties tests are in section 1(A) of each IWC Wage Order (for example, Wage Order 4, Cal. Code Regs., tit. 8, §11040). In summary:

• Executive: manages the business or a customarily recognized department; customarily and regularly directs the work of two or more employees; has authority to hire or fire, or whose recommendations on hiring, firing and promotion are given particular weight; customarily and regularly exercises discretion and independent judgment; and is primarily engaged in exempt duties.
• Administrative: performs office or non-manual work directly related to management policies or general business operations (or certain school administration work); customarily and regularly exercises discretion and independent judgment; and either directly assists a proprietor or exempt executive or administrator, performs specialized or technical work under only general supervision, or carries out special assignments under only general supervision; and is primarily engaged in exempt duties.
• Professional: licensed or certified by California and primarily engaged in law, medicine, dentistry, optometry, architecture, engineering, teaching or accounting, or primarily engaged in a learned or artistic profession, and customarily and regularly exercises discretion and independent judgment.

“Primarily” is measured by time. If more than half of your working hours go to non-exempt tasks, such as stocking shelves, running a register, data entry or routine customer service, you generally fail the duties test even if you supervise people some of the time.

Registered nurses: §515(f)

Under §515(f)(1), a registered nurse employed to engage in the practice of nursing cannot be classified as an exempt professional. A nurse can be exempt only if he or she individually meets the criteria for the executive or administrative exemption, such as a nurse manager who truly runs a unit.

Subdivision (f)(2) carves out three advanced-practice roles: certified nurse midwives, certified nurse anesthetists and certified nurse practitioners who are primarily engaged in duties that require their certification. Even those nurses must still meet the salary and other requirements in §515(a). Staff nurses paid a salary are generally owed overtime under California law.

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Other exemptions outside §515

• Computer software employees are covered by a separate statute, Labor Code §515.5, with its own duties test and pay floor.
• Outside salespersons are excluded by the Wage Orders.
• Health care workers covered by California’s health care minimum wage (Labor Code §1182.14 and following) face a different exempt salary floor. The Labor Commissioner’s guidance describes it as the greater of 1.5 times the health care minimum wage or 2 times the state minimum wage. See our guide to the health care minimum wage.

Key fact

Worked examples

💡 Example (hypothetical): Kevin is an “assistant manager” paid a $65,000 salary in 2026. That is below the $70,304 floor, so he is non-exempt regardless of his duties. He works 10 hours a day, five days a week. Under §515(d), his regular rate is his weekly salary ($65,000 ÷ 52 = $1,250) divided by 40 = $31.25, and his overtime rate is $46.875. His 10 overtime hours a week are worth $468.75. Over 48 working weeks, that is $22,500 in unpaid overtime for one year, before interest, penalties and missed meal and rest premiums.

💡 Example (hypothetical): Ana is an “operations coordinator” earning $80,000, well above the salary floor. But she spends about 70% of her time on data entry and scheduling that follows set procedures. Because she is not “primarily” (more than half her time) engaged in exempt duties, she fails the duties test and is non-exempt despite her salary.

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Remedies if you were misclassified

• Unpaid overtime under Labor Code §§510 and 1194, with interest, reasonable attorney’s fees and costs. See our page on claiming unpaid overtime.
• Meal and rest break premiums under Labor Code §226.7, because the break rules apply once you are non-exempt.
• Wage statement penalties (§226) and waiting time penalties (§203) if you have left the job.
• Civil penalties under §558 and the Private Attorneys General Act (PAGA).

Job titles and job descriptions do not decide the question. What matters is the salary actually paid and how you actually spend your time.

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Deadlines

Misclassification claims for unpaid overtime and break premiums generally must be brought within three years (Code of Civil Procedure §338(a)). In court, the Unfair Competition Law can extend recovery of unpaid wages to four years (Business and Professions Code §17208). PAGA penalty claims are generally limited to one year (Code of Civil Procedure §340).

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Where to file

You can file a wage claim with the Labor Commissioner’s Office (Labor Code §98), file a lawsuit in superior court individually or on behalf of a class of similarly classified employees, bring a PAGA claim after giving notice to the Labor and Workforce Development Agency, or proceed in arbitration if you signed an enforceable agreement. Exemption cases often turn on detailed evidence about daily tasks, so start gathering it early.

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How to build a misclassification claim

1. Write down what you actually do in a typical week and roughly how many hours each task takes.
2. Collect your offer letter, job description, pay stubs and any performance reviews.
3. Track your hours, including early starts, late nights and weekend email.
4. Note whether you can hire, fire or discipline, and whether your recommendations are followed.
5. Check your salary against the threshold for each year you worked.
6. Talk to an employment lawyer before your oldest overtime ages out.

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Related Labor Code sections

• §510: daily and weekly overtime rates.
• §515.5: computer software employee exemption.
• §1182.12: the state minimum wage that drives the salary test.
• §1194: lawsuits for unpaid overtime with attorney’s fees.
• §226.7: meal and rest premiums for non-exempt workers.

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Frequently asked questions

What is the minimum salary to be exempt in California in 2026?

$70,304 a year ($5,858.67 a month), which is two times the $16.90 state minimum wage for 2,080 hours. It rises to $72,384 on January 1, 2027, when the state minimum wage becomes $17.40.

If I earn more than $70,304, am I automatically exempt?

No. Salary is only one test. Under §515(a) and (e), you must also spend more than half your worktime on exempt duties and customarily and regularly exercise discretion and independent judgment.

Does a higher local minimum wage raise the exempt salary?

No. Section 515(a) ties the threshold to “the state minimum wage,” so city and county minimum wages do not change it.

Can registered nurses be exempt in California?

Generally not as professionals. Under §515(f), an RN employed to practice nursing is exempt only if he or she individually meets the executive or administrative test, with limited exceptions for certified nurse midwives, nurse anesthetists and nurse practitioners.

My employer calls me a manager. Does that make me exempt?

No. Titles do not control. The salary actually paid and how you spend more than half of your worktime decide whether the exemption applies.

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