The Department of Labor’s salary threshold for overtime is $684 per week, or $35,568 per year. Any salaried employee earning less than that is entitled to time-and-a-half for hours worked beyond 40 in a workweek, no matter what their job title says. Meeting the threshold doesn’t automatically make someone exempt, but falling below it always defeats the exemption.
Why the Threshold Is $684 and Not Higher
Employers and workers who read about a higher figure in 2024 are looking at a rule that no longer exists. In April 2024, the DOL issued a rule that raised the threshold to $844 per week on July 1, 2024, with a second jump to $1,128 per week scheduled for January 1, 2025, plus automatic updates every three years.
On November 15, 2024, the U.S. District Court for the Eastern District of Texas vacated the entire 2024 rule. The Trump administration declined to defend it on appeal, the Fifth Circuit dismissed the case on May 5, 2026, and the DOL published a final rescission in the Federal Register on May 15, 2026. That restored the 2019 salary levels and eliminated the automatic update mechanism.1U.S. Department of Labor. Earnings Thresholds for the Executive, Administrative, and Professional Exemption
Employers who raised salaries to meet the 2024 numbers don’t have to roll them back, but the law no longer requires them to. The enforceable federal floor is $684 per week. A future administration could try again — the Fifth Circuit has upheld the DOL’s authority to set a salary floor — but nothing new is currently in progress.
How the $684 Threshold Actually Works
The employee must earn at least $684 per week on a salary basis to potentially qualify as exempt. Fall below it, and the worker is owed overtime, period, even if their duties would otherwise fit an exemption.2U.S. Department of Labor. Fact Sheet 17G: Salary Basis Requirement and the Part 541 Exemptions Under the Fair Labor Standards Act
Nondiscretionary bonuses, incentive payments, and commissions can satisfy up to 10 percent of the threshold — $68.40 per week. These payments have to be made at least annually. If the total falls short at the end of a 52-week period, the employer has one pay period to make a catch-up payment. Skip that catch-up, and the exemption is lost for the entire period, meaning overtime is owed retroactively.3U.S. Department of Labor. Fact Sheet 17U: Nondiscretionary Bonuses and Incentive Payments and Part 541 Exempt Employees
One detail catches employers off guard: the threshold is not prorated for part-time workers. A salaried employee working 20 hours a week still has to earn at least $684 per week to be exempt. The full number applies no matter the schedule.
The Threshold Is Only One of Three Tests
Paying $684 or more doesn’t settle the question. Under 29 CFR Part 541, exemption requires all three of the following, and failing any one means the worker gets overtime.4eCFR. 29 CFR Part 541 – Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Computer and Outside Sales Employees
- Salary basis. The employee receives a fixed, predetermined amount each pay period that doesn’t move up or down based on the quality or quantity of work.
- Salary level. The fixed pay meets or exceeds $684 per week.
- Duties. The primary responsibilities fit the executive, administrative, or professional definitions in the regulations. Titles carry no weight; a “Director of Operations” who mostly stocks shelves is not performing exempt duties.
Executive duties mean managing the business or a department and regularly directing the work of at least two full-time employees or the equivalent.5eCFR. 29 CFR 541.104 – Two or More Other Employees Administrative duties mean office or non-manual work directly related to management or general business operations, involving independent judgment on significant matters. Professional duties mean work requiring advanced knowledge in a specialized field, typically acquired through extended academic study.
Some workers sit outside the salary test entirely. Teachers, practicing lawyers, and practicing physicians are exempt without meeting the salary level or salary basis tests.6eCFR. 29 CFR 541.303 – Teachers Outside sales employees are also exempt with no salary requirement.7U.S. Department of Labor. Fact Sheet 17F: Exemption for Outside Sales Employees Under the Fair Labor Standards Act Going the other direction, manual laborers and skilled tradespeople — electricians, plumbers, carpenters, mechanics, construction workers — can never be exempt, regardless of pay. The white-collar exemptions were designed for office and knowledge work.8U.S. Department of Labor. Fact Sheet 17I: Blue-Collar Workers and the Part 541 Exemptions Under the Fair Labor Standards Act
Highly Compensated Employees: A Separate Threshold
A streamlined exemption applies to workers earning at least $107,432 in total annual compensation. This number also reverted to its 2019 level after the 2024 rule fell. The employee still has to receive at least $684 per week on a salary or fee basis as part of that total.9U.S. Department of Labor. Fact Sheet 17H: Highly-Compensated Employees and the Part 541 Exemption Under the Fair Labor Standards Act
The tradeoff is a lighter duties test. The employer only needs to show the worker “customarily and regularly” performs at least one exempt duty, meaning more than occasionally. A recurring management responsibility counts; a one-off task doesn’t.
Total annual compensation can include commissions and nondiscretionary bonuses earned during the year. It cannot include health insurance premiums, retirement plan contributions, or the value of board and lodging.10eCFR. 29 CFR 541.601 – Highly Compensated Employees Employers can make a lump-sum catch-up payment at year end, or at termination, to hit the annual total.
Improper Deductions Can Destroy the Exemption
An exempt employee has to receive the full predetermined salary for any week in which they perform any work. Docking pay for a partial-day absence is generally off-limits. If an exempt worker puts in three hours Tuesday morning and leaves for personal reasons, the employer owes a full day’s pay.11U.S. Department of Labor. FLSA Overtime Security Advisor
The exceptions are narrow. Employers can deduct for full-day absences taken for personal reasons or sickness under a bona fide sick leave plan. Partial-day deductions are allowed only in the first or last week of employment, for unpaid FMLA leave, or for certain public agency situations.
An isolated mistake, corrected with reimbursement, won’t necessarily blow the exemption. A pattern is another matter. If improper deductions become an actual practice, the exemption is lost for every employee in the same job classification working under the manager responsible. In a large department, the exposure spreads fast.
State Thresholds That Sit Above the Federal Floor
Federal law sets a floor, not a ceiling. When a state’s salary threshold is higher, that’s the number employers have to meet in that state. At least half a dozen states currently require salary levels well above $684 per week. Some of the highest 2026 thresholds exceed $1,500 per week, or more than $80,000 annually. Others fall between roughly $1,100 and $1,350 per week, and even states with modest thresholds often sit several hundred dollars per week above the federal level.
The gap widened after the 2024 federal rule was rescinded. Employers with workers in multiple states may be tracking different thresholds for each location, and state numbers often adjust annually based on minimum wage or other formulas. State labor department websites publish the current figures.
What Misclassification Costs
Treating a non-exempt worker as exempt is expensive when it’s caught. The employee is owed all unpaid overtime going back two years, or three years if the violation was willful. Courts can add liquidated damages equal to the full amount of unpaid overtime, which effectively doubles the bill.12Office of the Law Revision Counsel. 29 USC 216 – Penalties
The DOL can also impose civil money penalties of up to $2,515 per violation for repeated or willful failures, a figure adjusted annually for inflation.13U.S. Department of Labor. Civil Money Penalty Inflation Adjustments When the same misclassification hits an entire job category, each affected employee is a separate violation. A company that wrongly exempts 20 workers for two years is not facing one penalty; it’s facing exposure for every worker in every pay period.
Employees can sue on their own to recover unpaid overtime, liquidated damages, and attorney’s fees. The DOL’s Wage and Hour Division investigates complaints and brings its own enforcement actions. Either route produces the same arithmetic: back pay, an equal amount in liquidated damages, and the employer’s legal costs on top.14U.S. Department of Labor. Fair Labor Standards Act Advisor – Recovery of Back Wages