Is salary the only thing that matters?
No. Salary is a floor. You also have to pass the duties test.
Read more →Can salaried be non-exempt?
Yes. Many salaried employees are entitled to overtime; salary is a method, not a status.
Read more →What is the 2026 threshold?
Federal $684/wk. CA $1,352, WA $1,541.70, NY-metro $1,275.
Read more →Am I exempt as a manager?
Not automatically. The job title is irrelevant. The duties have to qualify.
Read more →What “exempt” actually means
Exempt is shorthand for exempt from the FLSA overtime and minimum-wage rules. It is not a tax status. Your federal income tax withholding, your retirement plan eligibility, and your benefits do not change because you are exempt or non-exempt.
What does change is whether you have a legal right to extra pay for hours over 40 in a workweek. Non-exempt employees do. Exempt employees do not. The Fair Labor Standards Act (29 USC 201 et seq.) sets the federal floor; state rules can be stricter.
Salary Basis
You receive a predetermined amount each pay period that is not subject to reduction based on quantity or quality of work.
29 CFR 541.602Salary Level
You earn at least $684/week ($35,568/year) under federal rules. Several states require considerably higher.
29 CFR 541.600Duties
Your primary duty matches one of six recognised exempt categories: executive, administrative, professional (learned or creative), computer, outside sales, or highly compensated.
29 CFR 541.700The 2024-2025 rule you have probably read about, and why it does not apply
On 26 April 2024 the Department of Labor published a final rule lifting the salary threshold in two phases: $844/week from 1 July 2024, and $1,128/week from 1 January 2025. The first phase took effect.
On 15 November 2024 Judge Sean Jordan of the Eastern District of Texas vacated the entire rule nationwide in State of Texas v. U.S. Department of Labor. The threshold reverted to $684/week. The 1 January 2025 second phase never took effect.
On 24 April 2025 the new administration's DOL filed to hold the appeal in abeyance at the Fifth Circuit, effectively dropping the defence of the rule. As of April 2026 there is no replacement proposal on the regulatory agenda. The 2019 figures still control.
The federal floor is $684/wk. State thresholds have leapfrogged. Higher of state-or-federal applies.
Sources: CA DIR, WA L&I, NY DOL, CO DLSS, AK DOL, ME DOL official 2026 publications.
Executive
Manage a recognised department, supervise 2+ FTEs, hire/fire input.
Administrative
Office work directly related to management or operations, real discretion on matters of significance.
Professional
Advanced knowledge from prolonged study, or invention/originality in a creative field.
Computer
Systems analysis, software design, programming. Salary OR hourly.
Outside Sales
Primary work is making sales away from the employer’s premises. Customarily and regularly off-site.
Highly Compensated
Total comp $107,432+, $684/wk in salary, perform at least one EAP duty customarily and regularly.
Question 1 of 4
Salary basis check.
Are you paid the same fixed amount each pay period, regardless of the quantity or quality of work performed?
Document
Keep a contemporaneous daily hours log. Save emails, timesheets, your job description, and pay stubs. Note the gap between your title and your duties.
Compare duties
Walk through the salary basis, salary level, and duties tests for your role. Use our self-check or read the relevant exemption page.
File or sue
A free DOL Wage and Hour Division complaint, a private lawsuit, or joining an existing collective action are the three paths to recover unpaid overtime.
Running a classification audit?
Pull a census, run each exempt employee against the duties test, flag the borderlines, and decide between fix-forward and back-pay. Most growing employers are exposed in the same handful of roles: assistant managers running registers, “administrative” titles applying standards, IT support miscoded as computer-employee exempt.
What is the salary threshold for exempt employees in 2026?
Under federal law the threshold is $684 per week, or $35,568 per year. The Eastern District of Texas vacated the 2024 Department of Labor rule on 15 November 2024, reverting the rule to the 2019 figure. Several states require higher amounts (California $1,352/wk, Washington $1,541.70/wk, NYC and downstate New York $1,275/wk).
Is it better to be exempt or non-exempt?
It depends on hours worked. If you regularly work 50+ hours, non-exempt is usually better because you collect overtime at 1.5x your regular rate. Exempt employees get a fixed salary and often more benefits, but no extra pay for long weeks. Look at your actual hours over a normal month.
Can a salaried employee be non-exempt?
Yes. Salary is a payment method; exempt is a legal status. A salaried non-exempt employee keeps a fixed weekly salary but must still receive overtime for hours over 40, on top of the salary. Many growing employers use this structure for borderline classifications.
What are the three tests for exempt status?
Salary basis (paid the same fixed amount each pay period), salary level (at least $684/week federal, more in some states), and duties (primary duty matches one of the recognised exempt categories). All three must be met for the executive, administrative, professional, and computer salary-based exemptions.
Is a manager automatically exempt?
No. A title of manager, director, or VP means nothing on its own. The executive exemption requires a primary duty of management of a customarily recognised department, supervision of two or more full-time-equivalent employees, and meaningful authority over hiring and firing. An assistant manager who rings the register most of the day is likely non-exempt.
What happens if I am misclassified as exempt?
You can recover unpaid overtime for the prior two years (three years for willful violations) plus liquidated damages that double the back-wage award, plus attorney fees. You can file a free complaint with the DOL Wage and Hour Division, hire an employment attorney, or join a collective action against the employer.
Can my employer dock my exempt salary if I leave early or come in late?
Generally no. Partial-day deductions for personal absences break the salary basis test and can void the exemption for the entire workweek. The narrow exceptions (FMLA leave, full-day disciplinary suspensions for serious misconduct under written policy, offsetting jury duty pay) are listed in 29 CFR 541.602.
Are software engineers exempt?
Most full-time software engineers are exempt under either the computer employee exemption ($684/week salary or $27.63/hour) or the learned professional exemption (with a CS degree). Help-desk and tier-one support employees applying standards rather than designing systems are generally non-exempt despite working with computers.