Exempt vs. Non-Exempt in California (2025 Perspective)
Exempt vs. Non-Exempt in California (2025 Perspective)
✅ Exempt vs. Non-Exempt in California (2025 Perspective)
California continues to lead the nation in worker protection laws, and in 2025, the line between exempt and non-exempt is more important — and more scrutinized — than ever.
🔹 Why It Matters in 2025
Wage theft lawsuits and employee misclassification are still major legal issues in CA.
Remote/hybrid work and tech industry roles are blurring traditional job duties, making exemption status trickier.
Minimum wage increases raise the salary threshold for exempt status.
🧾 Key Differences
Exempt
Non-Exempt
Overtime Pay
❌ Not entitled
✅ Required by law
Breaks
❌ Not guaranteed by law
✅ Meal and rest breaks mandatory
Salary Basis
✅ Must be salaried
❌ Can be hourly or salaried
Wage Laws
❌ Some exemptions apply
✅ Fully protected under wage/hour laws
Duties Test
✅ Must pass duties test
❌ Duties test not needed
Job Examples
Managers, engineers, professionals
Admins, retail, hourly staff, most technicians
💵 2025 Exempt Salary Threshold (California)
To legally classify someone as exempt, their salary must be:
At least 2x the CA minimum wage for full-time work.
In 2025, the statewide minimum wage is $16/hr, so the exempt minimum is:
$66,560 per year (2 × $16/hr × 40 hrs/week × 52 weeks)
⚠️ Some cities (like SF, LA) have higher minimum wages — if applicable, that raises the local exempt salary requirement.
🧠 The “Duties Test” Still Matters
Even if someone earns $80k+, they’re not exempt unless they perform qualifying exempt job duties, like:
Managing people (supervisors)
High-level decision-making (admins with discretion)
Licensed professionals (lawyers, doctors, etc.)
Job title alone doesn’t make someone exempt.
🚩 Common 2025 Issues
Startups misclassifying employees to avoid overtime
Remote workers doing non-exempt work but being paid a salary
Pay compression: roles once exempt no longer meet new salary thresholds
Gig work & tech jobs trying to fit into exemption categories (still a legal battleground)
✅ Best Practice for Employers (2025)
Audit roles regularly
Watch for “manager” titles with no real authority (classic red flag)
