If you're a salaried employee in California, you may have wondered whether you should be receiving overtime pay. While many employers classify employees as "exempt" from overtime, not all salaried positions actually qualify for this exemption. One of the clearest ways to determine if you might be misclassified is by looking at your salary.

The Basics of Overtime Exemptions

California law generally recognizes several categories of exempt employees, including executive (managerial), administrative, and professional employees. These exemptions are meant for employees who exercise significant independent judgment and discretion in their work. Some jobs and industries, such some healthcare workers, outside salespeople, and computer professionals may be subject to different requirements for an exemption. But for many jobs and industries, including those falling under Industrial Welfare Commission's, Wage Order 4, fitting into these specific categories is important for a job to be classified exempt. And a vital element of any exception is being paid a minimum salary. 

The Salary Test: A Clear Minimum Threshold

For many white-collar employees, who will often fall under the purview of Wage Order 4, the minimum salary requirement is straightforward – to be properly classified as exempt, you must earn at least twice the state minimum wage for full-time employment. As of January 1, 2025, with California's minimum wage at $16.50 per hour, here's what this means:

• Minimum wage: $16.50/hour
• Full-time weekly hours: 40
• Weekly minimum wage earnings: $660 (40 hours × $16.50)
• Required weekly salary for exemption: $1,320 (2 × $660)
• Required annual salary for exemption: $68,640

If you earn less than this amount, you cannot be properly classified as exempt from overtime – regardless of your job duties or title.

Why This Matters

Many employees may be surprised to learn they've been misclassified as exempt when their salary falls below this threshold. This misclassification can have significant financial implications. For example, non-exempt employees under Wage Order 4 are entitled to:

• Overtime pay (1.5× regular rate) for hours worked beyond 8 in a day
• Double time pay for hours worked beyond 12 in a day
• Overtime pay for hours worked beyond 40 in a week
• Meal and rest break premiums if breaks are missed

Common Misconceptions

We often hear from clients who believe they're properly classified as exempt because:

• "I have a manager title"
• "I'm paid a salary"
• "I agreed to be exempt"
• "Everyone in my position is exempt"

However, for most professional, technical, and administrative employees, the salary threshold is a strict requirement. No agreement between you and your employer can waive this protection, and job titles don't determine exempt status.

Changes in the Minimum Salary Requirement

It's important to note that this minimum salary requirement adjusts with changes in the minimum wage. Recent increases in California's minimum wage mean the salary threshold has also increased:

• 2023: $64,480 annually ($15.50/hour minimum wage)
• 2024: $66,560 annually ($16.00/hour minimum wage)
• 2025: $68,640 annually ($16.50/hour minimum wage)

What Should You Do?

If you're classified as exempt but earning less than the minimum salary, you may be entitled to:

• Back pay
• Meal and rest break premiums
• Interest on unpaid wages
• Potential penalties

Protect Your Rights

Understanding your rights is the first step toward ensuring you're properly compensated for your work. While the rules we've discussed apply to many California employees, some positions and industries may have different requirements. If you believe you've been misclassified as exempt while earning less than the required minimum salary, consider speaking with an employment lawyer who can evaluate your specific situation and help you understand your options.

Remember, the salary requirement is just one part of determining whether you're properly classified as exempt. Even if you meet the salary threshold, your actual job duties must still qualify for the exemption. However, the salary test provides a clear, objective starting point for evaluating your classification.