Exempt vs. Non-Exempt in California: How to Classify Correctly

California presumes every employee is non-exempt (entitled to overtime, meal/rest periods, etc.). The employer carries the burden of proving an exemption applies — and exemptions are construed narrowly.

To qualify for a white-collar exemption, an employee must satisfy both:

• Salary-basis test. A predetermined, guaranteed monthly salary equal to at least two times the state minimum wagefor full-time work (Labor Code §515 and the applicable IWC Wage Order). Because it's tied to the state minimum wage, the threshold rises whenever the minimum wage does — re-check it each January.
• Duties test. The employee must be “primarily engaged in” exempt work — meaning more than 50% of their timeon exempt duties. This is a real differentiator: federal law uses a looser “primary duty” standard, but California measures actual time spent.

• Executive — manages the business or a department, directs 2+ employees, has hiring/firing authority.
• Administrative — office/non-manual work directly related to management or business operations, exercising independent judgment on significant matters.
• Professional — licensed professions or work requiring advanced knowledge / creative work.
• Specialized exemptions (e.g., computer professional, certain salespeople) carry their own rate and duties rules.

• Treating the job title as the answer. A “manager” who spends most of their time doing the same work as the team is likely non-exempt.
• Paying a salary but missing the 2× minimum-wage threshold.
• Assuming federal exempt status carries over to California.
• Classifying by convenience rather than by an honest duties analysis.

When a classification is close to the line, document the duties analysis and have it reviewed — the cost of getting it wrong is far higher than the cost of checking.