What Is the New FLSA Minimum Salary for Exempt Employees?

The FLSA minimum salary for exempt employees is $684 per week, which comes to $35,568 per year. That figure has governed federal overtime exemptions since a 2019 Department of Labor rule took effect, and it remains the enforceable threshold today. A 2024 DOL rule that would have raised the number in two steps was struck down by a federal court in November 2024, and no replacement rule has taken effect.

Why the 2024 Increase Didn’t Stick

In April 2024, the DOL issued a final rule raising the exempt salary threshold in two phases. The first phase, effective July 1, 2024, would have moved the minimum to $844 per week ($43,888 annually). The second, scheduled for January 1, 2025, would have taken it to $1,128 per week ($58,656 annually).¹

On November 15, 2024, the U.S. District Court for the Eastern District of Texas vacated the entire rule, erasing both phases.¹ The Biden administration filed a notice of appeal, but after the change in administration the DOL asked the Fifth Circuit to stay the case while the agency reconsiders. The stay was granted in April 2025.² The DOL has signaled it intends new rulemaking, but as of mid-2025 no proposed rule has been published. The $684 per week threshold continues to govern federal enforcement.

Salary Alone Doesn’t Make Someone Exempt

Hitting $684 per week is necessary but not sufficient. An employee also has to pass a duties test tied to what they actually do, not their job title. The FLSA recognizes three main white-collar exemption categories.³

Executive: the employee’s primary duty is managing the business or a recognized department, and they regularly direct the work of at least two full-time employees.⁴
Administrative: the employee performs office or non-manual work related to the management or general business operations of the employer and exercises independent judgment on significant matters.
Professional: the employee performs work requiring advanced knowledge in a field of science or learning, typically acquired through prolonged specialized education, and consistently exercises discretion.

Manual laborers and blue-collar workers can never be classified as exempt under these categories, whatever they earn. Production workers, construction workers, electricians, plumbers, mechanics, and similar tradespeople are always entitled to overtime under the FLSA. Paying a carpenter $100,000 a year doesn’t make them exempt.

Computer and Outside Sales Have Different Rules

Two other exemption categories don’t fit the standard salary pattern.

Computer employees working in systems analysis, programming, software engineering, or similar roles can be paid either the standard $684 per week salary or an hourly rate of at least $27.63.⁵ That hourly rate has not changed since 2004 and was not affected by the vacated 2024 rule. Help desk technicians, hardware repair staff, and employees who simply use computers as tools for their work don’t qualify.

Outside sales employees have no minimum salary requirement at all.⁶ The exemption turns entirely on duties: the employee’s primary work must be making sales or obtaining contracts, and they must regularly do that work away from the employer’s place of business. Someone making sales calls from a cubicle doesn’t qualify, no matter how much revenue they generate.

What “Salary Basis” Means

Beyond earning at least $684 per week, most exempt employees must be paid on a salary basis. That means a fixed, predetermined amount each pay period that doesn’t rise or fall based on hours worked or the quality of the output. If an exempt employee does any work during a week, they generally must receive the full weekly salary.⁷

Administrative and professional employees can alternatively be paid on a fee basis: a flat amount for completing a single, unique job regardless of how long it takes. To count toward the threshold, the fee must work out to at least $684 per week when measured against the hours the job took.⁸

Employers may reduce an exempt employee’s pay only in narrow situations: full-day absences for personal reasons, full-day sick leave under a bona fide paid leave plan, unpaid FMLA leave, unpaid disciplinary suspensions of one or more full days under a written policy, good-faith penalties for major safety rule violations, and the employee’s first and last partial weeks of employment.⁹ Half-day absences cannot be docked. Deductions outside these categories can destroy the exemption entirely, though an employer that maintains a written policy against improper deductions, provides a complaint channel, and reimburses mistakes generally keeps its exemptions intact.¹⁰

The Highly Compensated Employee Threshold

Employees earning at least $107,432 per year in total compensation face a relaxed duties test. Instead of meeting every element of one of the three standard duties tests, they need only perform at least one duty from any of the executive, administrative, or professional categories, as long as their work is office or non-manual.¹¹ At least $684 per week of that total must still be paid on a salary or fee basis.¹

Nondiscretionary bonuses, incentive payments, and commissions count toward the $107,432 total. Production bonuses, retention bonuses, and formula-based commissions all qualify.¹² A surprise holiday bonus given at the employer’s sole discretion does not count.

The vacated 2024 rule would have raised this threshold to $132,964 on July 1, 2024, and $151,164 on January 1, 2025. Both increases fell with the rest of the rule, so $107,432 remains the operative figure.¹

State Thresholds Can Be Higher

The federal number is a floor. Where a state or local jurisdiction sets a higher minimum salary for exempt status, the higher figure controls.³ As of 2026, state-level minimum salaries for exempt employees run from the federal default of $35,568 up to roughly $80,000 in the highest-cost states. Some states also set separate, higher hourly rates for exempt computer professionals. Employers with workers in more than one state need to check each location rather than defaulting to the federal figure.

What Misclassification Costs

Labeling someone exempt when they don’t meet both tests doesn’t eliminate the overtime obligation. It postpones it. Once misclassification is discovered, the employer owes back pay for all unpaid overtime the employee should have received.¹³

The FLSA also allows liquidated damages equal to the unpaid wages, effectively doubling the liability. The DOL and individual employees can both sue, and employees who sue can recover attorney’s fees and court costs on top.¹³ An employer that acted in good faith with reasonable grounds to believe it was compliant can ask a court to reduce or eliminate the liquidated damages, but it carries the burden of proving both.

The statute of limitations for recovering unpaid overtime is two years from the violation, extended to three years if the violation was willful.¹⁴ For a salaried employee routinely working 50-hour weeks, three years of back overtime doubled by liquidated damages adds up quickly.

1
U.S. Department of Labor. Earnings Thresholds for the Executive, Administrative, and Professional Exemption
2
U.S. Department of Labor. Final Rule: Restoring and Extending Overtime Protections
3
U.S. Department of Labor. Fact Sheet 17A: Exemption for Executive, Administrative, Professional, Computer and Outside Sales Employees Under the FLSA
4
U.S. Department of Labor. Fact Sheet 17B: Exemption for Executive Employees Under the FLSA
5
U.S. Department of Labor. Fact Sheet 17E: Exemption for Employees in Computer-Related Occupations Under the FLSA
6
eCFR. 29 CFR Part 541 Subpart F – Outside Sales Employees
7
U.S. Department of Labor. Fact Sheet 17G: Salary Basis Requirement and the Part 541 Exemption Under the FLSA
8
U.S. Department of Labor. FLSA Overtime Security Advisor
9
eCFR. 29 CFR 541.602 – Salary Basis
10
eCFR. 29 CFR 541.603 – Effect of Improper Deductions From Salary
11
U.S. Department of Labor. Fact Sheet 17H: Highly-Compensated Employees and the Part 541 Exemption Under the FLSA
12
U.S. Department of Labor. Fact Sheet 17U: Nondiscretionary Bonuses and Incentive Payments (Including Commissions) and Part 541 Exempt Employees
13
U.S. Department of Labor. Back Pay
14
Office of the Law Revision Counsel. 29 U.S. Code 255 – Statute of Limitations