In this guide11 sections
- Key takeaways
- The 2026 and 2027 exempt salary at a glance
- Who the salary threshold applies to
- Salary isn’t enough: the three duties tests
- How local minimum wages fit in
- Signs you may be misclassified
- What you can recover if you were misclassified
- Deadlines to file a misclassification claim
- What to do if you think you’re misclassified
- Frequently asked questions
- Talk to a California employment lawyer
The California exempt salary minimum is $70,304 a year in 2026, and it rises to $72,384 a year on January 1, 2027. If you earn less than that and your employer calls you “exempt,” you are very likely owed overtime. Even if you earn more, you are exempt only if your actual day-to-day duties meet one of California’s strict duties tests.
Key takeaways
- The exempt salary is two times the state minimum wage for full-time work: $16.90 × 2 × 2,080 hours = $70,304 in 2026, and $17.40 × 2 × 2,080 = $72,384 in 2027.
- Salary alone never makes you exempt. You must also spend more than half your working time on exempt duties.
- Higher city minimum wages generally don’t raise the exempt salary, but they do set your pay if you are misclassified.
- Misclassified workers can generally recover unpaid overtime for three years, plus break premiums, penalties, interest and attorney’s fees.
The 2026 and 2027 exempt salary at a glance
Under Labor Code §515, most exempt employees must earn a monthly salary of at least two times the state minimum wage for full-time employment. Full-time means 40 hours a week, or 2,080 hours a year. The Department of Industrial Relations confirmed the 2027 figures in an August 13, 2026 announcement.
| Year | State minimum wage | Exempt salary (annual) | Monthly | Weekly |
|---|---|---|---|---|
| 2023 | $15.50 | $64,480 | $5,373.33 | $1,240 |
| 2024 | $16.00 | $66,560 | $5,546.67 | $1,280 |
| 2025 | $16.50 | $68,640 | $5,720 | $1,320 |
| 2026 | $16.90 | $70,304 | $5,858.67 | $1,352 |
| 2027 | $17.40 | $72,384 | $6,032 | $1,392 |
Older figures still matter. If you are owed back pay for 2024 or 2025, the threshold in effect during each of those years applies to that period. Employers have until January 1, 2027 to raise exempt salaries to at least $72,384 or start treating those workers as nonexempt, with overtime and breaks.
Who the salary threshold applies to
The salary floor applies to California’s three main “white-collar” exemptions: executive, administrative and professional. These are the exemptions employers most often use for managers, supervisors, office staff, analysts and coordinators.
- It must be a true salary. Generally, you must receive a fixed amount each pay period that isn’t cut because work was slow or you had a short day. Docking pay for partial-day absences can cost the employer the exemption.
- Job titles decide nothing. “Manager” or “specialist” on an offer letter means nothing if your actual work doesn’t meet a duties test.
- California’s threshold is higher than federal law. When state and federal rules differ, California workers get the more protective rule.
- Some jobs have their own rules. Outside salespeople have no salary test. Certain computer software professionals and hourly physicians have separate pay minimums that the state updates each year; see our guide to the computer professional exemption. Covered health care employees must earn the greater of 1.5 times the health care worker minimum wage or two times the state minimum wage to be exempt.
Registered nurses are a special case. Under Labor Code §515(f), nurses employed to practice nursing generally can’t be classified as exempt professionals. They may qualify only if they individually meet the executive or administrative test, and certain advanced practice nurses are treated differently.
Salary isn’t enough: the three duties tests
Your employer must also prove that you are “primarily engaged” in exempt work, which Labor Code §515(e) defines as more than half of your working time. California courts read exemptions narrowly, and the employer carries the burden of proving one applies.
| Exemption | What your job must generally involve | Common misclassification |
|---|---|---|
| Executive | Managing the business or a recognized department; regularly directing two or more employees; real authority or weight on hiring, firing and promotions; regular discretion and independent judgment | “Assistant managers” who spend most of the day on the register or doing the same work as the crew |
| Administrative | Office or non-manual work directly related to management policies or general business operations; regular discretion and independent judgment on matters of significance | Customer service, data entry, claims processing and other roles that follow set procedures |
| Professional | A licensed or learned profession (such as law, medicine, engineering, teaching or accounting) or genuinely original artistic work; regular discretion and judgment | Paralegals, junior “analysts” and technicians whose work is routine or closely supervised |
California looks at what you actually do week to week, not your job description. For a deeper walk-through, read our guide to misclassified exempt employees and the duties test.
How local minimum wages fit in
Many California cities and counties set local minimum wages above the state rate. The §515 formula is calculated from the state minimum wage, and local ordinances generally don’t change it. So in most cases the exempt floor is $70,304 in 2026 statewide, whether you work in Fresno or West Hollywood.
Local rates still matter. If you are misclassified, you are a nonexempt employee entitled to at least the local minimum wage for every hour, plus overtime. Check your city’s rate on our California minimum wage by city page.
Signs you may be misclassified
- Your salary is below $70,304 in 2026 (or will be below $72,384 in 2027) and you aren’t paid overtime.
- Your pay is cut when you work fewer hours or leave early.
- You spend most of your day doing the same work as hourly coworkers.
- You follow scripts, checklists or manuals and need approval for most decisions.
- You “supervise” people but have no real say in hiring, firing or discipline.
- You regularly work more than 8 hours a day or 40 hours a week, often without real breaks.
What you can recover if you were misclassified
- Unpaid overtime. Time and a half after 8 hours in a day or 40 in a week (and for the first 8 hours on a seventh consecutive workday), and double time after 12 hours in a day (Labor Code §510). For a salaried worker, the regular rate is generally the weekly salary divided by 40 (Labor Code §515(d)).
- Meal and rest break premiums. One extra hour of pay for each workday a required meal break wasn’t provided, and one for each workday a rest break wasn’t provided (Labor Code §226.7).
- Waiting-time penalties. If you’ve left the job and your employer willfully failed to pay all wages owed, you may be owed up to 30 days of wages (Labor Code §203). A good-faith dispute over whether wages were owed can be a defense.
- Pay stub penalties. For a knowing and intentional violation, generally $50 for the first pay period and $100 for each later one, up to $4,000 (Labor Code §226(e)).
- Interest, attorney’s fees and civil penalties. Unpaid overtime earns interest, and employees who win overtime claims can recover attorney’s fees (Labor Code §1194). Some cases also support penalties under the Private Attorneys General Act.
Hypothetical example. Maria earns $70,304 a year as an “office manager” but mostly answers phones and processes orders. Her weekly salary is $1,352, so her regular rate is $33.80 an hour and her overtime rate is $50.70. She works 10 hours a day, five days a week: 10 overtime hours, or $507 a week. Over 48 working weeks, that’s $24,336 a year, or $73,008 over three years, before break premiums, penalties and interest. If she quits and the overtime isn’t paid with her final wages, waiting-time penalties could add at least about $8,112 (30 days × her $270.40 daily salary). Estimate your own numbers with our wage and hour claim calculator.
Deadlines to file a misclassification claim
| Claim | General deadline |
|---|---|
| Unpaid overtime and wages | 3 years (Code of Civil Procedure §338(a)) |
| Unpaid wages under the Unfair Competition Law (court only) | Up to 4 years (Business and Professions Code §17208) |
| Pay stub penalties | Generally 1 year (Code of Civil Procedure §340(a)) |
| Waiting-time penalties | Generally 3 years, the same as the underlying wage claim |
You can file a claim with the Labor Commissioner or bring a lawsuit. Compare the two in Labor Commissioner wage claim vs. hiring a lawyer.
What to do if you think you’re misclassified
- Write down your hours. Keep a private log of start, stop and break times. Notes made at the time are strong evidence.
- Save your pay stubs and offer letter outside work email and devices.
- List what you actually do. Estimate what share of your week goes to each task. This is the heart of the duties test.
- Request your records. See how to request your personnel file and payroll records.
- Don’t sign a release without advice. Some employers offer small payments for a waiver once they spot the problem.
Frequently asked questions
What is the California exempt salary for 2026?
$70,304 a year ($5,858.67 a month, $1,352 a week) for most executive, administrative and professional employees: two times the $16.90 state minimum wage times 2,080 hours.
What will the exempt salary be in 2027?
$72,384 a year ($6,032 a month, $1,392 a week), effective January 1, 2027, based on the $17.40 state minimum wage.
If I earn more than $70,304, am I automatically exempt?
No. Your employer must also show that you meet a duties test and spend more than half your time on exempt work. Many well-paid employees are misclassified.
Does a higher city minimum wage raise the exempt salary?
Generally no. The state salary test is based on the state minimum wage. Local minimums matter for nonexempt workers, including misclassified ones.
Can my employer switch me to hourly when the threshold rises?
Yes. An employer may reclassify you as nonexempt instead of raising your salary. From then on, you must be paid overtime and get meal and rest breaks.
Can I be punished for raising a misclassification concern?
Labor Code §98.6 prohibits retaliation for complaining about unpaid wages or filing a wage claim.
Talk to a California employment lawyer
Employees First Labor Law represents workers exclusively in overtime and misclassification cases across California. We offer free virtual consultations to review your duties, pay and hours. Contact us online or call (310) 853-3461.
This article is general information about California law as of 2026, not legal advice for your situation. Reading it does not create an attorney-client relationship.
