FLSA Exemption Tests: Salary Basis, Duties, and the $684 Floor

Calling someone “salaried” or “a manager” does not skip overtime. Under the Fair Labor Standards Act, a white-collar employee is exempt from federal overtime only if they pass the tests that actually apply: a salary basis, a salary (or hourly) threshold, and a duties test for one of the Part 541 categories (29 USC §213(a)(1), 29 CFR Part 541).

As of May 2026, the federal standard salary floor is still $684 per week ($35,568 per year) — the DOL’s 2019 Final Rule figure. The 2024 attempt to raise it to $1,128/week was vacated nationwide and formally rescinded. High pay does not fix a bad pay structure either: in Helix Energy Solutions Group v. Hewitt, 598 U.S. 39 (2023), a worker earning over $200,000 on a daily-rate arrangement was non-exempt because the structure failed the salary-basis test.

This article is the employer deep-dive on those tests. For the broader overtime framework and state daily-OT overlays, see overtime rules by state and the source research overtime laws by state. For what happens when salary is paid but exemption fails, see salaried non-exempt employees. For a 60-second version, see when the FLSA considers you exempt.

Quick reference

• Three tests, not one title. Salary basis + salary/hourly threshold + duties. Fail any required test → non-exempt → overtime owed.
• Federal salary floor: $684/week ($35,568/year) under the 2019 Final Rule. The 2024 increase was vacated (Nov. 15, 2024) and rescinded (May 14, 2026).
• HCE floor: $107,432/year total annual compensation under the 2019 rule, with at least $684/week on a salary basis, plus a shorter duties test (29 CFR §541.601).
• Computer employees: $684/week or $27.63/hour (29 CFR §541.400).
• Outside sales: no federal minimum salary (29 CFR §541.500); duties still control.
• Employer burden: you prove every element (Corning Glass Works v. Brennan, 417 U.S. 188 (1974)). Courts give exemptions a “fair reading” after Encino Motorcars v. Navarro, 584 U.S. 79 (2018) — the burden still sits with the employer.
• State floors can exceed federal. Research notes California at about $68,640/year (2× state minimum wage), Washington at 2.5× minimum wage for larger employers, and Colorado at $1,057.69/week under COMPS Order 40 for 2025. Do not invent other state floors from this page alone.

The 5 most expensive exemption mistakes

1. Treating “salaried” as “exempt”

A salary is a pay form. Exempt is a legal status. A worker can be both salaried and non-exempt — owed 1.5× the regular rate for hours over 40 under 29 USC §207(a)(1). The research’s cost sketch: a misclassified coordinator at $50K claiming 10 unpaid OT hours per week, doubled by liquidated damages across 2–3 years, lands around $52,000 per worker before attorneys’ fees — then multiply by every person in the same job description.

2. Skipping the duties test after the paycheck clears $684

Clearing the salary floor is necessary for most white-collar categories. It is not sufficient. A “manager” who cannot hire or fire and directs no one fails the executive test. A “coordinator” who follows procedures someone else wrote fails the administrative independent-judgment prong. Title inflation is how class actions get a job description.

3. Daily-rate or hour-docked “salary” structures (the Helix trap)

Helix Energy Solutions Group v. Hewitt holds the line at the high end: even a $200K+ worker fails if the pay structure is not a true salary basis under 29 CFR §541.602 / §541.604(b). Daily rates that vary with days worked are the classic failure mode.

4. Assuming high total pay means HCE without checking the shorter duties test

HCE at $107,432 total annual compensation is not “anyone paid a lot is exempt.” The employee must still customarily perform at least one exempt executive, administrative, or professional duty and primarily perform office or non-manual work (29 CFR §541.601), and still receive at least $684/week on a salary basis as part of that total.

5. Stopping hour records because “they’re exempt”

29 CFR §516.2 recordkeeping applies to every non-exempt employee. If classification is wrong and records are missing, Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946) lets the employee’s good-faith recollection carry the claim. Track hours for salaried roles you are only mostly sure about. See recordkeeping requirements by state.

The three federal tests

An employee is exempt from federal overtime under the white-collar exemptions only if they pass all three of these tests where the category requires them:

1. Salary basis

Paid a predetermined amount each pay period that does not drop based on quality or quantity of work (29 CFR §541.602). Partial-day docking for ordinary absences, daily rates that scale with days worked, and similar structures create salary-basis risk — Helix is the Supreme Court illustration.

2. Salary (or hourly) threshold

Path	Federal floor (operative May 2026)
Standard EAP (executive, administrative, professional)	$684/week ($35,568/year)
Computer	$684/week or $27.63/hour
Highly compensated	$107,432/year total annual compensation, including ≥ $684/week on salary basis
Outside sales	No federal minimum salary

Source: 2019 Final Rule; research table for computer and outside sales.

3. Duties test (primary duty)

The employee’s primary duty must fit a Part 541 category (29 CFR §541.700). Primary duty is what the employee actually does — not the offer letter label.

Screen a role against the federal Part 541 factors as you read. Results are multi-factor screening only — not a legal determination. The employer still bears the burden of proof.

Try a scenario

Coordinator · $50Kduties often failExecutive · clears floorall three duty prongsComputer · hourly$≥27.63/hr pathHCE · high payshorter duties test

Exemption category to screen

Executive — 29 CFR §541.100Administrative — 29 CFR §541.200Professional (learned or creative) — 29 CFR §§541.301–.302Computer employee — 29 CFR §541.400Outside sales — 29 CFR §541.500Highly compensated employee (HCE) — 29 CFR §541.601

Primarily manages the business or a department, directs 2+ employees, and has hiring/firing authority (or particular weight in those recommendations). 29 CFR §541.100 →

Weekly salaryAnnual salary

Weekly salary

$

Federal floor for most white-collar exemptions: $684/week.

Paid on a salary basis?

A predetermined amount each pay period that does not drop based on quality or quantity of work (29 CFR §541.602). Daily-rate structures often fail — even at high total pay (Helix Energy, 2023).

Yes — salary basisNo / daily rate / hour deductionsNot sure

Duties checklistEvery element below has to fit the employee’s primary duty — not the job title.

• Primary duty is managing the enterprise, or a customarily recognized department or subdivisionTitle alone is not enough — the work has to actually be management.
  YesNo
• Customarily and regularly directs the work of two or more other full-time employees (or their equivalent)
  YesNo
• Has authority to hire or fire, or recommendations on hiring, firing, advancement, or change of status are given particular weight
  YesNo

Screening incomplete

Screening incomplete — answer pay, salary-basis, and duties questions to get a directional result. Until then, assume non-exempt treatment is safer.

• Category screened: Executive (29 CFR §541.100).
• Primarily manages the business or a department, directs 2+ employees, and has hiring/firing authority (or particular weight in those recommendations).
• Federal white-collar salary floor: $684/week ($35,568/year) under the 2019 Final Rule — operative after the 2024 increase was vacated and rescinded in May 2026.
• Entered pay ≈ $684/week (≈ $35,568/year).
• Salary-screen status: meets the federal pay floor on the inputs provided.
• Duties-screen status: incomplete.

Not legal advice. This analyzer is a multi-factor screening aid only. It does not determine FLSA exemption status. The employer bears the burden of proof. State salary floors may be higher than the federal $684/week threshold. When classification is uncertain, track hours and pay overtime, or get employment counsel.

Read the full methodology →

Duties tests by category

The table below is the research-backed map. Screen a real role in the analyzer above while you read.

Category	Salary threshold	What the duties actually have to be
Executive	$684/week	Primarily manages the business or a department, directs 2+ employees, and has hiring/firing authority (or particular weight in those recommendations) (29 CFR §541.100).
Administrative	$684/week	Primarily office work directly related to management or general business operations of the employer or its customers, requiring discretion and independent judgment on significant matters (29 CFR §541.200).
Professional (learned)	$684/week	Primarily work requiring advanced knowledge in a field of science or learning, customarily acquired through specialized intellectual instruction — engineers, accountants, lawyers, doctors, RNs (29 CFR §541.301).
Professional (creative)	$684/week	Primarily work requiring invention, imagination, originality, or talent in a recognized artistic field (29 CFR §541.302).
Computer	$684/week or $27.63/hr	Primarily systems analysis, programming, software engineering, or related specialized computer work (29 CFR §541.400).
Outside sales	No minimum	Primarily making sales away from the employer’s place of business (29 CFR §541.500).
Highly compensated	$107,432/yr total	Customarily performs at least one exempt duty from the categories above (29 CFR §541.601); threshold from the 2019 Final Rule.

Executive — common failure modes

• “Shift manager” who cannot hire or fire and whose recommendations carry no particular weight.
• “Team lead” who still spends most time on the same production work as the people next to them, with no real department to manage.
• Directing one employee, or only occasional assignment of tasks, when the regulation looks for two full-time employees (or equivalent).

Administrative — common failure modes

• Production or sales-floor work labeled “operations.”
• Following detailed procedures with little room for independent judgment on matters of significance.
• Purely clerical processing that is not related to management or general business operations.

Professional — learned and creative paths

Learned professional work is not “any college degree.” The knowledge must be advanced, in a field of science or learning, and customarily acquired through specialized intellectual instruction. Creative professional work turns on invention, imagination, originality, or talent in a recognized artistic field — not every marketing or content role qualifies.

Computer — not every IT ticket

Help-desk, ordinary network monitoring, and “IT generalist” roles that lack systems analysis, programming, or software engineering as the primary duty usually fail. The hourly $27.63 path is real for qualifying computer work; it is not a shortcut for non-qualifying duties.

Outside sales — “away from the employer’s place of business”

Inside sales from a fixed office is not outside sales under §541.500, even if the person is paid on commission. The regulation is about where the sales work is customarily and regularly performed.

Highly compensated — shorter duties test, not a free pass

HCE still needs office or non-manual work as the primary duty frame, customarily at least one exempt EAP duty, total annual compensation at the 2019 floor, and the $684/week salary-basis component. Helix still applies if the pay structure is not a salary.

The 2024 salary rule: raised, vacated, rescinded

Employers still see outdated “$1,128/week in 2025” language on blogs and some eCFR displays. The operative timeline from research:

1. April 2024 — DOL final rule would raise the standard threshold to $844/week (July 1, 2024) and $1,128/week (January 1, 2025), and HCE to $151,164 (89 Fed. Reg. 32842).
2. November 15, 2024 — State of Texas v. United States Department of Labor, No. 4:24-cv-499 (E.D. Tex.) vacated the rule nationwide. The court held the rule exceeded the agency’s authority by effectively converting the duties test into a salary-only test.
3. May 5, 2026 — Fifth Circuit dismissed the appeal after the administration declined to defend the rule.
4. May 14, 2026 — DOL formally rescinded the 2024 final rule. The salary threshold remains $684/week under the 2019 framework.

Practical takeaway: configure payroll exemption floors to $684/week and $107,432 HCE unless and until a new federal rule is lawfully issued and effective — and still run the duties and salary-basis tests every time.

The salaried non-exempt trap

When someone fails the exemption tests but is still paid a salary, they are salaried non-exempt. You owe overtime. Two federal computation methods exist under 29 CFR §778.113 (fixed workweek) and 29 CFR §778.114 (fluctuating workweek / half-time premium). California, Pennsylvania, and Alaska reject the fluctuating-workweek method under state law. Full math, prerequisites, and state carve-outs live in salaried non-exempt employees.

If you only remember one operational rule: once a role is non-exempt, track hours every workday and every workweek the same way you would for hourly staff.

State salary floors noted in research

This article does not invent a 50-state exempt-salary table. The overtime research calls out these higher floors as of the 2025–2026 snapshot:

• California — exempt salary threshold at 2× state minimum wage for 40 hours/week. With state minimum wage at $16.50/hour for most employers (2026 research snapshot), that is $68,640/year — well above federal $35,568. Applies to executive, administrative, and professional exemptions under IWC Wage Orders; computer professional thresholds are set separately by DIR and indexed annually.
• Washington — 2.5× state minimum wage for larger employers.
• Colorado — COMPS Order 40 retained $1,057.69/week for 2025.

When federal and state tests both apply, the employee generally gets the more protective result. Clearing $684/week federally is not enough for a California white-collar exemption if the state salary floor is higher.

Worked classification sketches

Alex — “Project coordinator,” $50,000 salary (~$961/week), follows a written SOP, supervises no one, no hiring input

• Salary floor: met ($961 ≥ $684).
• Salary basis: assume yes.
• Administrative duties: independent judgment on matters of significance — fails.
• Result: salaried non-exempt. Track hours. Pay overtime. Exposure multiplies across everyone in the same description.

Jordan — field “manager” paid a daily rate totaling $200,000+ per year

• Total pay: high.
• Salary basis: daily-rate structure fails Helix / §541.604(b) pattern.
• Result: non-exempt despite high earnings if the structure is not a true salary. Overtime math still applies; HCE does not rescue a failed salary basis.

Sam — software engineer, $40/hour, primary duty designing and modifying production systems

• Computer pay test: $40 ≥ $27.63 hourly path — met.
• Duties: design/development path — likely met if that is truly primary.
• Result: may support computer exemption — still confirm primary duty in practice and any state computer-professional rules (California indexes separately).

Riley — commission salesperson working customer sites most days, no fixed office sales role

• Outside sales salary floor: not applicable federally.
• Duties: making sales + customarily away from employer’s place of business — both required.
• Result: outside sales may apply if both duty prongs are real; inside sales from HQ does not become outside sales by title.

Decision tree

1. Is the worker covered by a non–white-collar exemption? (motor carrier, agriculture, etc.) — out of scope here; see industry sections in the overtime research.
2. Is pay on a true salary basis (or computer hourly / outside sales path)? If no → stop; non-exempt on white-collar grounds.
3. Does pay clear the federal floor for the category ($684, $27.63/hr, or $107,432 HCE)? If no → non-exempt for that category.
4. Does primary duty match every required element (or a valid any-of path for professional/computer)? If no → non-exempt.
5. Does the work state impose a higher salary floor or different duties rules? If yes → apply the stricter test.
6. If any answer is “not sure” → track hours and treat as non-exempt until counsel or a documented audit says otherwise.

FAQ

If you discover you’ve been misclassifying

1. Stop the bleeding. Reclassify affected roles to non-exempt, start tracking hours, and pay overtime going forward.
2. Audit lookback. Federal: 2 years ordinary / 3 years willful (29 USC §255(a)). State windows can run longer (California UCL 4 years; New York 6 years; Massachusetts treble damages under state wage law).
3. Recompute overtime at 1.5× the regular rate for hours over 40 (and state daily rules where they apply). Liquidated damages can double federal recovery (29 USC §216(b)).
4. Do not destroy or “clean up” incomplete time records. Missing records help the employee under Mt. Clemens.
5. Get counsel above the exposure threshold that justifies it — pattern misclassification across a job title is class- and collective-action shaped.

Through-line

Salary is how you pay. Exemption is what the FLSA allows you to skip. The federal white-collar path still runs through salary basis, the $684/week floor (or the computer hourly / HCE / outside-sales alternatives), and real duties under Part 541 — not titles, not org charts, and not “everyone knows managers don’t get OT.” The 2024 rule’s vacatur and 2026 rescission put the salary number back at the 2019 level; they did not simplify the duties test. When in doubt, track the hours. When the hours exist, the overtime math is a payroll problem. When the hours do not exist, the overtime claim becomes an evidence problem you will lose.

Sources

Federal statute

• 29 USC §207 — Maximum hours
• 29 USC §213 — Exemptions
• 29 USC §216 — Penalties
• 29 USC §255 — Statute of limitations

Federal regulations

• 29 CFR Part 541 — White-collar exemptions
• 29 CFR §541.100 — Executive
• 29 CFR §541.200 — Administrative
• 29 CFR §541.301 — Learned professional
• 29 CFR §541.302 — Creative professional
• 29 CFR §541.400 — Computer
• 29 CFR §541.500 — Outside sales
• 29 CFR §541.600 — Salary amount
• 29 CFR §541.601 — Highly compensated
• 29 CFR §541.602 — Salary basis
• 29 CFR §516.2 — Recordkeeping

Rulemakings and guidance

• 2019 Overtime Salary-Threshold Final Rule, 84 Fed. Reg. 51230
• 2024 Final Rule (vacated), 89 Fed. Reg. 32842
• DOL Fact Sheet #17A

Cases

• Helix Energy Solutions Group v. Hewitt, 598 U.S. 39 (2023)
• Encino Motorcars, LLC v. Navarro, 584 U.S. 79 (2018)
• Corning Glass Works v. Brennan, 417 U.S. 188 (1974)
• Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946)
• State of Texas v. DOL, No. 4:24-cv-499 (E.D. Tex. Nov. 15, 2024)

Cluster research

• Overtime laws by state research