The new overtime rule’s salary threshold is not in effect. A federal court vacated the Department of Labor’s 2024 rule nationwide before its second phase took effect, so the floor for overtime-exempt white-collar workers remains $684 per week, or $35,568 per year, the level set by the 2019 rule. If you earn less than that and work more than 40 hours in a week, your employer generally owes you time-and-a-half for every extra hour. Earning above the floor doesn’t automatically make you exempt: your actual job duties still have to fit one of the recognized white-collar categories.
Current Salary Thresholds
Two federal thresholds govern today, and both come from the 2019 final rule:
- Standard exemption: $684 per week ($35,568 per year). An employee earning less than this qualifies for overtime, no matter what their job title says.
- Highly compensated employee exemption: $107,432 per year in total compensation, including at least $684 per week paid on a salary basis.
These figures have been in place since January 1, 2020, and will remain until a new rule is finalized or a court reinstates the 2024 increases.1U.S. Department of Labor. Earnings Thresholds for the Executive, Administrative, and Professional Exemption
Employers can use nondiscretionary bonuses, incentive payments, and commissions to satisfy up to 10 percent of the standard salary level, provided those payments are made at least once a year. 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. Skipping that catch-up means the employee was non-exempt for the entire year and is owed overtime for every extra hour worked during that stretch.2U.S. Department of Labor. Fact Sheet 17U: Nondiscretionary Bonuses and Incentive Payments (Including Commissions) and Part 541 Exempt Employees
Why the 2024 Rule Isn’t the Law
The Department of Labor’s April 2024 final rule was supposed to lift the standard threshold to $844 per week on July 1, 2024, and then to $1,128 per week ($58,656 annualized) on January 1, 2025. It would also have raised the highly compensated employee threshold to $132,964, then to $151,164, and built in automatic updates every three years.3Federal Register. 29 CFR 541 – Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees
On November 15, 2024, the U.S. District Court for the Eastern District of Texas vacated the entire rule nationwide. The court found that the salary increases were so large they effectively replaced the duties-based analysis Congress intended with a pure income test, exceeding the Department of Labor’s authority under the Fair Labor Standards Act. The automatic update mechanism was also struck down as an end-run around the notice-and-comment rulemaking process required by the Administrative Procedure Act. For enforcement purposes, the Department of Labor has stated it is applying the 2019 thresholds.4U.S. Department of Labor. Overtime Pay
The first phase, which took the standard threshold to $844 on July 1, 2024, briefly applied and was then wiped out along with the rest of the rule. If you got a raise or a reclassification in mid-2024 because of the rule, the federal legal basis for it no longer exists, though state law or your employment agreement may still control.
Salary Alone Doesn’t Decide It
Clearing the $684 threshold is necessary but not sufficient. Two other tests have to be met before an employee can be classified as exempt.
The Salary Basis Test
The employee has to be paid on a salary basis: a predetermined amount each pay period that doesn’t shrink when the employee works fewer hours or produces less output. If an exempt employee does any work in a given week, they’re generally owed their full weekly salary for that week. Docking pay because business was slow or because the employee left early on a Tuesday can destroy the exemption and trigger overtime liability going back months.5U.S. Department of Labor. Fact Sheet 17G: Salary Basis Requirement and the Part 541 Exemption
Limited exceptions allow deductions for full-day personal absences, full-day sickness absences when a paid leave plan exists, unpaid disciplinary suspensions of one or more full days for serious workplace misconduct, and partial weeks at the start or end of employment.
The Duties Tests
The employee’s actual day-to-day work has to fit one of the recognized white-collar categories. The 2024 rule did not change these duties tests, and this is where most misclassification claims are won or lost.
The executive exemption covers employees whose primary duty is managing the business or a recognized department. They must regularly direct the work of at least two other full-time employees (or the equivalent) and have genuine authority over hiring, firing, or promotion decisions, or make recommendations that carry real weight.6eCFR. 29 CFR Part 541 – Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Computer and Outside Sales Employees7eCFR. 29 CFR 541.104 – Two or More Other Employees
The administrative exemption applies to office or non-manual work directly related to general business operations or management policies. The key requirement is exercising discretion and independent judgment on significant matters. A bookkeeper entering numbers into a system someone else designed doesn’t qualify. An operations manager who decides how to restructure a workflow does.
The professional exemption covers work requiring advanced knowledge in a field of science or learning, usually acquired through a prolonged course of specialized study. The work has to be primarily intellectual and varied, not routine.
The highly compensated employee exemption gives a lighter duties test to workers earning at least $107,432 annually. They only need to regularly perform at least one exempt duty from any of the executive, administrative, or professional categories. It applies only to office or non-manual workers, so a highly paid electrician or carpenter doesn’t qualify.8eCFR. 29 CFR 541.601 – Highly Compensated Employees
Workers Exempt Without Any Salary Threshold
Some categories skip the salary test entirely. Teachers at elementary, secondary, and higher education institutions are exempt regardless of what they earn, as long as their primary duty is teaching, tutoring, instructing, or lecturing.9eCFR. 29 CFR 541.303 – Teachers Licensed doctors and lawyers actually practicing their professions are also exempt with no salary floor.6eCFR. 29 CFR Part 541 – Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Computer and Outside Sales Employees
Outside sales employees, meaning workers whose primary duty is making sales or obtaining orders while regularly working away from the employer’s office, are exempt with no salary requirement. An inside salesperson working from a call center doesn’t qualify, even if they close large deals.10eCFR. 29 CFR Part 541 Subpart F – Outside Sales Employees
Computer professionals can qualify either through the standard salary test or by earning at least $27.63 per hour. Their work must involve systems analysis, programming, software engineering, or similar high-level technical functions. Help desk staff and hardware repair technicians generally don’t qualify.11U.S. Department of Labor. Fact Sheet 17E: Exemption for Employees in Computer-Related Occupations
State Thresholds That Override Federal
Federal law sets the floor, not the ceiling. Several states have their own overtime salary thresholds well above the federal $684 per week, and where a state threshold is higher, your employer must meet the state standard. California, New York, Washington, and Colorado are among the states with salary levels above the federal minimum, with some exceeding $1,100 per week. Check your state’s department of labor site, because these figures change annually and the gap has widened since the federal 2024 rule was struck down.
What Misclassification Costs
An employee wrongly denied overtime can recover the full amount of unpaid overtime plus an equal amount in liquidated damages, effectively doubling the bill. Courts also award reasonable attorney’s fees and costs. The employee can sue directly, or the Secretary of Labor can bring an enforcement action.12Office of the Law Revision Counsel. 29 USC 216 – Penalties
The statute of limitations is two years for standard violations and three years for willful ones. In a collective action covering many employees, the total exposure can reach millions. The Department of Labor can also seek injunctions and assess civil money penalties for repeated or willful underpayment, set at $2,515 per violation as of 2025.13U.S. Department of Labor. Back Pay14U.S. Department of Labor. Civil Money Penalty Inflation Adjustments
If you earn between $684 and $1,128 per week and wondered whether the 2024 rule made you eligible for overtime, the salary number alone doesn’t answer the question either way. Your employer still has to prove your duties fit one of the white-collar exemptions. When the title says “manager” but the actual work is the same as everyone else’s on the floor, the exemption doesn’t hold up.