Exemption and Misclassification

When a Job Title Is Used to Deny You Overtime and Breaks

How you are classified determines which protections you receive. Employers sometimes label workers as exempt, or as independent contractors, to avoid paying overtime, providing meal and rest breaks, and reimbursing expenses. When the label does not match what you actually do, you may be misclassified, and you may be owed substantial back pay and penalties.

If you are paid a salary and denied overtime, or treated like an employee but called an independent contractor, your rights may have been violated.

Exempt Versus Non-Exempt Employees

Non-exempt employees are entitled to overtime, meal and rest breaks, and other minimum working condition protections. An employer can treat you as exempt only if can prove you meet strict legal tests. Being paid a salary, or being given an impressive title, does not by itself make you exempt. What matters is your actual pay and your actual duties.

The Salary and Duties Tests

To be exempt under the main white-collar exemptions, you generally must satisfy two separate tests. The salary test requires that you earn at least twice the state minimum wage for full-time work, which for 2026 comes to $70,304 per year, and some industries with higher minimum wages require more. The duties test requires that you actually spend more than half of your time on genuinely exempt work, such as executive, administrative, or professional duties. Separate exemptions exist for outside salespeople and certain computer software employees. A title like manager does not make you exempt if you spend most of your time doing the same tasks as the hourly staff you supposedly supervise.

Independent Contractor Misclassification and the ABC Test

California law presumes that a worker is an employee, not an independent contractor. Under Labor Code section 2775, which codified the ABC test from the Dynamex decision and Assembly Bill 5, a hiring business must prove all three of the following to treat a worker as a contractor: that the worker is free from the control and direction of the hirer in performing the work, that the worker performs work outside the usual course of the hiring business, and that the worker is customarily engaged in an independently established trade or business of the same nature. If the business cannot prove all three, the worker is an employee. Certain occupations fall under statutory exceptions and are judged by an older multi-factor standard instead.

Signs You May Be Misclassified

Misclassification is often hidden in a title or a contract. You may be misclassified if:

• You are paid a salary but regularly work past eight hours a day or forty hours a week with no overtime
• Your title is manager or supervisor, but you mostly do the same work as hourly employees and make no real management decisions
• You are denied meal and rest breaks that non-exempt employees receive
• You are called an independent contractor, yet the company controls how, when, and where you work, provides your tools, and can discipline or fire you

What You Can Recover

If you were misclassified, you may be able to recover unpaid overtime, missed meal and rest break premiums, unpaid minimum wages, and, for misclassified contractors, reimbursement of business expenses, all with interest. Depending on the facts you may also recover waiting time penalties, wage statement penalties, and civil penalties under the Private Attorneys General Act, along with your attorney’s fees and costs. Because employers usually misclassify entire categories of workers, these cases are often brought as class actions.

You generally have three years to pursue wage claims under the Labor Code, and up to four years under the state’s unfair competition law. Because the analysis turns on your actual duties and working conditions, it helps to have an attorney review your situation early.

Frequently Asked Questions

Does being paid a salary make me exempt from overtime?

No. A salary is only part of the picture. To be exempt you must also meet the duties test, spending more than half your time on genuine executive, administrative, or professional work. Many salaried employees are misclassified and are owed overtime.

What are the tests for exempt status in California?

Two tests must both be met: a salary test, generally at least twice the state minimum wage for full-time work, which is $70,304 per year for 2026, and a duties test based on the work you actually perform.

My title is manager, but I do the same work as my team. Am I really exempt?

Probably not. If you spend most of your time on the same tasks as the employees you supposedly manage, rather than on genuine management duties, you likely do not meet the duties test and may be owed overtime.

What is the ABC test?

It is the standard for independent contractor status. A worker is presumed an employee unless the hiring business proves the worker is free from its control, performs work outside its usual business, and is engaged in an independent trade of the same nature. All three must be met.

What can I recover if I was misclassified?

You may recover unpaid overtime, meal and rest premiums, unpaid minimum wages, expense reimbursement for contractors, and various penalties and interest, plus your attorney’s fees. These claims are often pursued on behalf of a group of workers.

Schedule Your Free Consultation

At Righetti Law in San Francisco, our attorneys represent employees in California state and federal courts and have decades of experience handling wage-and-hour and class action matters. We have recovered millions for our clients in court and in settlement.

Your consultation will be confidential, and we will not contact your employer.

Call our firm at 415-983-0900 for a complimentary, confidential consultation. You may also complete our online contact form.