Locate the Activity you wish to exempt the User from and go into its administration area (see find content in Find Learning or Content Manager if you're unsure how to do this).
Click on the Users tab on the left-hand side.
All Users registered onto that Activity will be displayed.
If there are a lot of registered Users, so you cannot see the User(s) you need to exempt, you can search for them by typing their name into the Search by name box and pressing the Enter key on your keyboard. 
Alternatively, you can filter the registrations by their Completion Status by clicking on the Any Status dropdown menu, as shown below.
When you have located the User(s), tick the box(es) next to their name(s).
Choose Set Exemption from the Actions dropdown menu.
Add an Exemption reason, if required, within the popup window. Adding a reason helps if you have multiple Administrators or if you need to see why the User(s) was exempted some time after it happened. Click on Set Exemption within the popup window.
The User(s) will now be marked as Exempt.
The Completion Status on the User’s profile will show as Exempt, however they will show as Completed when running Reports. You will need to add the 'Is Exempt' field when editing/creating Reports if you need to show this information.