Salary ≠ Exempt: Understanding California’s White-Collar Exemptions
In California, just being paid a salary does not automatically make an employee exempt from overtime or other wage and hour protections. To lawfully classify a worker as exempt under California’s white-collar exemptions—executive, administrative, or professional—employers must satisfy two strict legal tests:
1. The Duties Test
The employee must spend more than 50% of their work time performing job duties that are considered “exempt” in nature. These duties generally include:
- Executive: Managing the business or a department, supervising two or more employees, and having authority in hiring/firing decisions.
- Administrative: Performing non-manual work directly related to business operations, with discretion and independent judgment.
- Professional: Working in a recognized learned or artistic profession that typically requires advanced education (e.g., lawyers, doctors, architects).
If the employee spends most of their day on routine, manual, or non-exempt tasks—like clerical work, customer service, or following strict procedures—they likely fail the duties test, even if their title suggests otherwise.
2. The Salary Test
To qualify as exempt, an employee must also earn a fixed salary equivalent to at least twice the state minimum wage for full-time work (40 hours/week).
In 2025, this threshold is:
- $1,320/week, or
- $68,640/year
Failing to meet either of these tests—duties or salary—means the employee must be classified as non-exempt and is entitled to overtime pay and other wage protections.
🧮 California’s 2025 Minimum Salary Threshold
As of January 1, 2025, California’s statewide minimum wage is $16.50/hour. That means:
$16.50 × 2 × 40 hours/week × 52 weeks = $68,640/year
($5,720/month)
This is the minimum salary required for an employee to be considered exempt from overtime laws under California Labor Code § 515.
🏙️ What If Local Minimum Wage Applied?
While California law uses the state minimum wage—not local rates—for determining exempt status, this has led to inconsistencies for salaried workers in cities with much higher local minimum wages.
If California updated the law to reflect local minimum wage levels, here’s what the minimum exempt salary would look like:
| City or County | Local Min. Wage (July 1, 2025) | Hypothetical Exempt Salary (2× Min. Wage) |
|---|---|---|
| San Francisco | $19.18/hour | $79,334.40/year |
| Berkeley | $19.18/hour | $79,334.40/year |
| Emeryville | $19.90/hour | $82,784.00/year |
| Pasadena | $18.04/hour | $74,732.80/year |
| Los Angeles (City) | $17.87/hour | $74,249.60/year |
| Santa Monica | $17.81/hour | $73,924.80/year |
| Uninc. Los Angeles Co. | $17.81/hour | $73,924.80/year |
| Milpitas | $18.20/hour | $75,712.00/year |
| Sonoma County | $23.15/hour | $96,712.00/year |
⚠️ Important: These are hypothetical salary thresholds. As of 2025, the only binding rule is based on the state minimum wage—$68,640/year.
Why Misclassification Matters
Being classified as “exempt” means your employer doesn’t have to pay you overtime, provide meal and rest breaks, or follow many of the wage and hour protections under California law. But if your salary falls below the legal threshold—currently $68,640 per year for most exempt employees in 2025—you may be misclassified, even if your job title sounds “professional” or “managerial.”
Here’s why that matters:
- You may be owed significant unpaid wages.
If you worked more than 8 hours in a day or 40 hours in a week without overtime pay, you could be entitled to time-and-a-half or double time for those hours. - You’re entitled to meal and rest breaks.
Non-exempt employees must receive a 30-minute meal break for every 5 hours worked and a paid 10-minute rest break for every 4 hours. Failure to provide these can lead to additional penalties. - You may recover substantial civil penalties.
A misclassified employee may also recover:- Waiting time penalties (up to 30 days’ pay for late final wages)
- Inaccurate wage statement penalties
- PAGA (Private Attorneys General Act) penalties for Labor Code violations affecting you and others
- Your employer may owe penalties beyond your own compensation.
If other employees were also misclassified, this could lead to class action or representative PAGA claims, increasing the employer’s liability substantially.
Talk to EFLL if You Think You’re Misclassified
At Employees First Labor Law, we’ve helped hundreds of California workers recover what they’re owed after being misclassified. Whether you’re a retail manager, assistant director, field supervisor, or office admin, if you’re salaried and not getting overtime, we’ll help you find out if your rights are being violated.
✅ Free consultations
✅ No upfront fees
✅ Millions recovered for California workers
📩 Schedule a consultation
📞 Call us now to speak with an employment law attorney
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