Do Salaried Employees Get Overtime Pay Under FLSA Rules
One of the biggest myths in US employment law is that paying someone a salary automatically strips them of overtime rights. It does not. Under the Fair Labor Standards Act (FLSA), “salaried” and “exempt from overtime” are two completely different things — and many salaried workers are legally entitled to 1.5× overtime pay.
The Three-Test Rule for Exemption
To be legally exempt from overtime, a salaried employee must pass all three of these tests. Fail any single one, and you’re non-exempt and entitled to overtime.
- Salary basis test — You’re paid a predetermined, fixed salary that doesn’t vary with the quality or quantity of work.
- Salary level test — Your salary meets the federal minimum threshold.
- Duties test — Your actual job duties fit an exempt category (executive, administrative, professional, computer, or outside sales).
The label on your paycheck or offer letter is irrelevant. What matters is the substance of all three tests.
The 2026 Salary Threshold
Effective May 15, 2026, the federal standard salary threshold is $684 per week ($35,568 per year). This is the 2019 level, formally restored after the 2024 Biden-era rule was vacated.
Wait, what happened with the 2024 rule? It had raised the threshold to $844/week on July 1, 2024, with a further increase to $1,128/week scheduled for January 1, 2025. But on November 15, 2024, a Texas federal court struck it down nationwide, holding that the DOL had overemphasized salary at the expense of the duties test. The Fifth Circuit dismissed the appeals in May 2026, leaving the 2019 standard in force.
For highly compensated employees, the threshold is $107,432 per year in total compensation, with at least $684/week paid on a salary basis. Computer employees have an hourly alternative of $27.63/hour.
What This Means for Salaried Workers
If your weekly salary is below $684, you’re almost certainly non-exempt — the salary level test fails on the numbers alone, regardless of your title or duties. That means you’re owed 1.5× for every hour over 40 in a workweek, and your employer must track your hours.
Even above the threshold, the duties test must be satisfied. A worker with a “manager” title who doesn’t actually direct two or more full-time employees, or who lacks genuine hiring and firing authority, may still be non-exempt. Misclassification here is common — and costly.
Actually, I had a client a few years back who was a “team lead” at a marketing agency, making $500/week. She worked 55 hours a week but thought she wasn’t entitled to overtime because she was “salaried.” Turns out, $500/week is well below the $684 threshold, so she was non-exempt and owed thousands in back overtime.
High-Profile Enforcement
The Department of Labor actively pursues misclassification. In July 2026, the DOL recovered over $500,000 in back wages from a San Diego deli that paid workers a flat $100/day for 11-hour shifts — averaging 55 hours per week — without paying overtime. Each of six workers received roughly $83,000 in back wages.
The lesson? A flat salary or day rate doesn’t extinguish overtime liability. If you’re working more than 40 hours a week, you need to check whether you’re properly classified.
State Thresholds May Be Higher
Several states set their own, higher salary thresholds for exemption. California, New York, and others require employers to apply the stricter of the state or federal standard. Always verify the rule in your jurisdiction.
To check your own status quickly, use the FLSA Overtime Eligibility Checker, which applies the salary basis, salary level, and duties tests. For a deeper comparison, read our Exempt vs Non-Exempt guide.
