Simplify Time Tracking & Compliance For All Employee Types

Exempt vs Non-Exempt California

Employees in California are classified as exempt or non-exempt, which determines their duties and pay structure. The state classifies employees as exempt when their annual salary is at least $58,240, while those who earn less will be considered non-exempt.

Exempt vs. non-exempt classifications are not exclusive to California. Federal and state laws determine if an employee earns overtime pay, meal breaks, and paid time off, among others. California has its own distinction, with annual pay among the criteria. 

The following factors determine whether a job or employee is exempt vs non-exempt in California.

  • Income
  • Job title
  • Work duties

As mentioned, in California, employees are considered exempt if they are paid at least $58,240 a year. The figure is valid as of January 1, 2021, and is subject to change in the future. It is double the former California minimum wage of $14 an hour, multiplied by 40, which represents the full work hours in a week, and 52, which represents the work weeks in a year. The current minimum wage is $15.50 per hour, effective January 1, 2023. 

But companies with fewer than 25 employees have a higher limit for non-exempt workers: $54,080. 

When it comes to job titles, white-collar jobs are more likely to be considered exempt than blue-collar ones. Among the job titles with exempt status are the following:

  • Executive titles – CEO, CFO, COO, department vice president, director, board member, etc. 
  • Administrative titles – executive secretary, senior assistant, personal assistant, etc. 
  • Professional titles – consultant, doctor, lawyer, IT manager, senior accountant, etc. 

Then there are those jobs classified as exempt based on their terms of work, such as the following:

  • Freelancers
  • Independent contractors
  • Salespersons who earn more than half of their wage in commissions

Why are classifications important? It’s because exempt employees are exempted from the legal protections of California’s wage and hour laws and are therefore not entitled to overtime pay and breaks. Exempt workers are also not restricted by the minimum wage law, but they earn way above minimum wage anyway.


Simplify Time Tracking & Compliance For All Employee Types

Free for 14 days. No credit card required. Cancel anytime.

More On This