Not legal advice. Educational guide to general U.S. employment law. Rules vary by state — consult an employment attorney for specific cases.
01
The three-part test
Every white-collar exemption from FLSA overtime requires three things at once. Salary basis: a predetermined amount, paid free and clear, not reduced for quality or quantity of work — the docking rules in 29 CFR 541.602 are their own minefield, covered in the salary deductions guide. Salary level: at least $684 per week under 541.600 — the 2024 rule that briefly raised this was vacated in November 2024, restoring $684 as the federal standard. Duties: the employee's actual work must satisfy an exemption test. Fail any prong and the employee is non-exempt — owed time-and-a-half past 40 hours, calculated per the regular-rate guide.
02
The duties tests
ExecutivePrimary duty is managing the enterprise or a department; customarily directs two or more full-time employees; authority (or real influence) over hiring and firing.
AdministrativeOffice work directly related to management or general business operations, exercising discretion and independent judgment on matters of significance — the most-litigated phrase in wage law.
ProfessionalWork requiring advanced knowledge in a field of science or learning acquired by prolonged specialized instruction (learned), or invention and originality in a creative field (creative).
ComputerSystems analysis, design, or programming at a high level — paid on salary at $684/week or hourly at $27.63+. Help desk and support roles generally fail this test.
Outside salesPrimary duty is making sales away from the employer's place of business. No salary requirement — but inside sales doesn't qualify.
03
Common misclassifications
The "manager" who mostly works the line
Primary duty is what the employee actually spends effort on — a shift lead doing the same work as the crew fails the executive test.
The "administrator" following a manual
Applying well-established procedures isn't discretion and independent judgment — claims processors and bookkeepers routinely lose exempt status in audits.
The salaried IT support tech
Installing, maintaining and troubleshooting doesn't meet the computer-employee test, whatever the salary.
The title promotion without a raise past $684
Below the salary level, duties are irrelevant — the employee is non-exempt, full stop (outside sales, teachers, lawyers and doctors excepted).
04
Fixing a misclassification
When an audit finds a bad classification, the exposure is back overtime for two years — three if willful — usually doubled as liquidated damages, plus attorney's fees. Reclassify going forward: announce it as a compliance review outcome, start time tracking, set the hourly rate deliberately (divide the salary by expected hours so total pay stays level), and take state law into account — California and Washington in particular run thresholds far above federal. Where past exposure is real, quantify it with counsel before the first employee asks the question; the unpaid overtime guide covers how those claims actually arrive.
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Frequently asked questions
If an employee is salaried, are they exempt from overtime?No — salary is just one prong. A salaried employee whose duties don't meet an exemption test (executive, administrative, professional, computer, or outside sales) is non-exempt and owed overtime, no matter what the offer letter says.
What is the current FLSA salary threshold?$684 per week ($35,568 annually) under 29 CFR 541.600. The Department of Labor's 2024 rule raising it was vacated by a federal court in November 2024, which restored the $684 standard — though several states set higher thresholds of their own.
Can we pay a non-exempt employee a salary?Yes — salaried non-exempt is a lawful and common arrangement. The salary covers straight-time for the agreed hours, and you still must track time and pay overtime past 40. Classification controls the overtime duty; pay method doesn't.
Which states have higher exemption thresholds?California and Washington run far above the federal level (both compute from their minimum wages), New York sets its own executive/administrative figures, and others adjust annually. You must satisfy both federal and state tests — the stricter one wins.
