Salaried Does Not Mean No Overtime: The Exempt Status Test Every California Worker Should Know

“Salaried” is not a magic word in California. Calling an employee a manager, supervisor, or exempt employee does not automatically remove their right to overtime pay. California has strict legal tests for overtime exemptions — and many workers labeled “exempt” are owed years of back pay.

The Two-Part Test — Both Must Be Met

To legally classify a California employee as overtime-exempt, the employer must satisfy both of these conditions:

Part 1 — Salary Level: The employee must earn a fixed salary of at least 2x the California minimum wage for full-time employment. In 2025, that means at least $5,720 per month. If you earn less than this, you are non-exempt regardless of your title.

Part 2 — Duties Test: The employee must primarily — meaning more than 50% of their actual work time — perform exempt executive, administrative, or professional duties. Job title is irrelevant. What you actually do determines your classification.

Common Misclassification Scenarios

• “Assistant Manager” who mostly runs the register and stocks shelves
• “Team Lead” who works alongside crew members more than managing them
• “Supervisor” whose salary is below $5,720/month
• “Salaried” employee who has no real authority to hire, fire, or make business decisions

What You Can Recover

If you were misclassified as exempt, you can recover 3 years of unpaid overtime, liquidated damages (potentially doubling the recovery), interest at 10% per year, and attorney fees if you win in court. PAGA — the Private Attorneys General Act — creates additional civil penalties per employee per pay period.

Educational use only. Not legal advice. Justice Foundation.