Misclassification – How California “Salaried” Employees May Be Entitled to Overtime

Employers often misclassify employees as “salaried” to avoid paying overtime. Learn California’s strict exemption tests and find out if you’re entitled to back pay and damages.

California has some of the strongest wage and hour laws in the nation, including strict requirements for when an employee can be classified as “salaried” or exempt. Employers often misclassify employees as exempt to avoid paying overtime, meal and rest break premiums, and other wage protections.

If you are working long hours without overtime pay, you may have been misclassified — and you could be entitled to significant compensation.

What Is “Misclassification”?

A misclassification occurs when an employer incorrectly labels an employee as exempt from overtime or other wage protections.

This article will focus on misclassification for employees under Wage Order 5, which include:

professional, semiprofessional, managerial, supervisorial, laboratory, research, technical, clerical, office work, and mechanical occupations. Said occupations shall include, but not be limited to, the following: accountants; agents; appraisers; artists; attendants; audio-visual technicians; bookkeepers; bundlers; billposters; canvassers; carriers; cashiers; checkers; clerks; collectors; communications and sound technicians; compilers; copy holders; copy readers; copy writers; computer programmers and operators; demonstrators and display representatives; dispatchers; distributors; door-keepers; drafters; elevator operators; estimators; editors; graphic arts technicians; guards; guides; hosts; inspectors; installers; instructors; interviewers; investigators; librarians; laboratory workers; machine operators; mechanics; mailers; messengers; medical and dental technicians and technologists; models; nurses; packagers; photographers; porters and cleaners; process servers; printers; proof readers; salespersons and sales agents; secretaries; sign erectors; sign painters; social workers; solicitors; statisticians; stenographers; teachers; telephone, radiotelephone, telegraph and call-out operators; tellers; ticket agents; tracers; typists; vehicle operators; x-ray technicians; their assistants and other related occupations listed as professional, semiprofessional, technical, clerical, mechanical, and kindred occupations

(Wage Order 5(2)(P).)

The Salary Threshold

To qualify as an exempt (salaried) employee, California law requires a guaranteed salary that is at least twice the state minimum wage.

In 2025, that means an exempt employee must earn at least $68,640 per year (or $5,720 per month) to be classified properly.
(See Wage Order 5(1)(A))

If you earn less than this amount, you are likely entitled to overtime pay, regardless of your job title or duties.

The “Duties Test” – Executive and Administrative Exemptions

Even if the employer meets the threshold of paying the employee twice the minimum wage per month, California law generally only permits certain types of positions to be exempt.  This is called the administrative, executive, or professional exemption. This article will focus only on the administrative and executive exemptions, since those are the issues that generally come up in litigation. However, professional occupations include lawyers, medicine, architecture, certain artistic professions, accounting, engineering, etc. (See Wage Order 5(1)(A)(3).)

Executive Exemption

You must:

• Manage the company or a recognized department;
• Supervise at least two employees;
• Have authority (or input) in hiring and firing decisions;
• Exercise independent judgment and discretion; and
• Primarily perform exempt duties.
  (See Wage Order 5(1)(A)(1))

Administrative Exemption

You must:

• Perform work related to management or general business operations;
• Regularly exercise discretion and independent judgment;
• Assist an executive/proprietor or perform specialized work with minimal supervision; and
• Primarily perform exempt duties.
  (See Wage Order 5(1)(A)(2))

In most cases, litigation centers on whether the employee truly had “independent judgment and discretion” — or if they were required to follow detailed company procedures without deviation.

Damages for Misclassified Employees

If you were misclassified, you may recover:

• Unpaid overtime and double time
• Missed meal and rest break premiums
• Interest and liquidated damages
• Attorney’s fees and penalties

For employees who worked 10–12 hours per day for years, these damages can quickly add up to tens of thousands of dollars.

Erkel Law, P.C. has successfully represented misclassified employees and secured significant settlements for our clients.

Talk to an Employment Attorney Today

Erkel Law, P.C’s wage and hour attorney helps employees recover unpaid overtime and protect their rights under California law.  If you believe you’ve been misclassified as a “salaried” employee, contact Erkel Law, P.C. today. We will evaluate your pay, job duties, and classification — and help you recover the wages you’re owed under California law. Call us for a free consultation.

Serving employees throughout Los Angeles County and Southern California.