By Mudassir Khan
Being paid a salary does not make you exempt, and neither does a fancy job title. Three tests decide it, and employers fail them constantly. Here is how to run the tests on your own job.
Rules verified November 2026 · Sources: U.S. Department of Labor
FLSA exemption needs all three: pay on a fixed salary basis, at least $684 per week, and primary duties that match an executive, administrative, or professional role. Fail any one and you are nonexempt and owed overtime. Titles never decide, duties do. If you are misclassified, back overtime can reach back two years, or three if the violation was willful.
To be exempt under the main white collar exemptions, a job must pass every test below. Miss one and the worker is nonexempt, entitled to time and a half for hours over 40, regardless of what the offer letter says.
The federal salary level is $684 per week ($35,568 per year). Earn even slightly less on a salary basis and you are automatically nonexempt, with no duties analysis needed. This is the 2019 level: a 2024 Department of Labor rule that would have raised it was vacated by a federal court in November 2024, and the Department formally rescinded that rule in May 2026. A separate threshold applies to highly compensated employees, currently $107,432 per year in total compensation. Computer employees have an alternative: at least $27.63 per hour. Outside sales employees, teachers, doctors, and lawyers have no salary test at all.
Several states set higher salary levels, including California, New York, Washington, Colorado, Alaska, and Maine. When the state level is higher, the employer must meet it.
The worker must be paid a predetermined, fixed salary that is not reduced because of variations in the quality or quantity of work. An employer that docks pay for a slow afternoon or a partial day absence generally destroys the salary basis, and with it the exemption. Narrow exceptions exist: deductions for full day absences taken for personal reasons, full day sick or injury absences under a bona fide plan, penalties for major safety violations, full day disciplinary suspensions, and the first or last week of employment, plus partial day deductions from leave banks in some circumstances. Everything else is suspect.
This is where most misclassification cases are won and lost. The primary duty must genuinely fit an exemption:
A retail worker is titled assistant manager, earns $700 per week, and spends 90 percent of her time stocking shelves, running the register, and cleaning, exactly like the hourly staff. She opens the store and closes it but hires no one and sets no schedules.
Verdict: nonexempt. The title buys nothing. Every 50 hour week owes her 10 hours of overtime at time and a half.
A salaried office worker earns $650 per week, works 45 hours, and genuinely does administrative work with real discretion over purchasing decisions.
This is the simplest misclassification to spot: the salary math alone decides it, and many workers who assume they are exempt because they are salaried are caught exactly here.
Misclassification has a second flavor: workers labeled independent contractors who are actually employees. Contractors are not covered by FLSA overtime at all, which is why the label is so attractive to employers who want to avoid it. The test looks at the economic reality of the relationship: who controls the work, whether the worker can profit or lose, how permanent the relationship is, and similar factors. A 1099 form does not decide employment status any more than a manager title decides exemption.
Pay rules on this page follow DOL Fact Sheet 23: overtime pay requirements of the FLSA and the Department of Labor's earnings thresholds guidance for the executive, administrative, and professional exemptions, with exemption details in 29 CFR part 541.
$684 per week, or $35,568 per year. A 2024 Department of Labor rule that would have raised it was vacated by a federal court in November 2024, and the Department formally rescinded that rule in May 2026, so the 2019 level is the one currently enforced. Highly compensated employees have a separate threshold of $107,432 per year.
No. Exemption turns on what you actually do, the duties test, plus the salary basis and salary level tests. A job title like manager, supervisor, or specialist proves nothing on its own.
Generally no. The salary basis test requires a predetermined salary not reduced for variations in the quality or quantity of work. Improper deductions can destroy the exemption for the affected period, with only narrow exceptions like full day absences for personal reasons.
Generally two years, or three years if the violation was willful. Because the clock runs from when each paycheck was due, waiting quietly can cost you the oldest claims first.
Keep your own records of hours and pay, raise it with payroll or HR in writing if you are comfortable, and remember that the FLSA protects you from retaliation. You can also file a confidential complaint with the Department of Labor's Wage and Hour Division for free, or talk to a local employment lawyer.
Estimate what you are owed with the overtime pay calculator, and read our FLSA overtime rules guide for the coverage basics that apply before the exemption analysis even starts.