FLSA Salary Threshold 2026: The Federal Exempt Minimum, Every State That Sets a Higher One, and What to Do When a Salary Falls Short

What the FLSA Salary Threshold Is

The Fair Labor Standards Act lets employers exempt certain executive, administrative and professional (EAP) employees from overtime, but only if those employees are paid on a salary basis at or above a minimum weekly amount set by the Department of Labor (DOL). That amount is the salary threshold, also called the salary level. An employee paid less than the threshold cannot be exempt under the EAP exemptions no matter what their duties are, and must receive overtime for hours over 40 in a workweek.

The threshold is one of three tests. Meeting it does not by itself make an employee exempt; the salary basis and duties tests must also be satisfied. For the full classification method, see our guide to exempt vs non-exempt employees. This page concentrates on the number: what it is for 2026 federally and in each state that sets its own, how it got there, and what payroll and HR need to do about it.

The threshold is expressed per week, and the comparison is weekly. A part-time exempt employee still has to earn at least $684 in each week they work. Up to 10 percent of the federal level, $68.40 a week, can be met with nondiscretionary bonuses, incentive payments and commissions paid at least annually, with a catch-up payment allowed in the first pay period after the year ends.

The 2026 Federal Threshold

The federal numbers for 2026 are those set by the DOL's 2019 rule, which took effect on January 1, 2020.

There is no automatic inflation adjustment in the current rule. The federal threshold changes only when the DOL completes a new rulemaking, so $684 remains in force until a new final rule is published and survives review.

Why the 2024 Increase Never Took Effect

In April 2024 the DOL published a final rule raising the standard threshold in two steps: to $844 a week ($43,888) on July 1, 2024 and to $1,128 a week ($58,656) on January 1, 2025, with the HCE level rising to $132,964 and then $151,164, and automatic updates every three years from 2027. Many employers raised salaries or reclassified staff for the July 2024 step.

On November 15, 2024, in Texas v. U.S. Department of Labor, the U.S. District Court for the Eastern District of Texas vacated the entire 2024 rule nationwide, including the July 2024 step that had already taken effect. The court held that the increases were large enough to make salary, rather than duties, the deciding factor for exemption, which exceeded the authority Congress gave the department. The threshold reverted to $684 a week, where it had been since 2020.

The vacated text remained in the Code of Federal Regulations until the DOL issued a technical amendment on May 14, 2026, published in the Federal Register on May 15, 2026, that removed the 2024 language and restored the 2019 regulatory text. The amendment made no substantive change; it aligned the printed regulation with the law as the court had left it. No new proposed rule to raise the threshold had been published at the time of writing.

Employers that raised salaries to $844 in July 2024 were not required to lower them, and most did not. Reducing an employee's salary back to the old level is legal under federal law but requires advance notice in many states and carries an obvious morale cost.

State Exempt Salary Thresholds for 2026

States may set a higher salary floor than the federal one, and where they do, employers must use the higher figure for employees working in that state. Most states follow the federal $684. These six do not.

Four cautions. First, New York's professional exemption uses the federal $684, not the state figure, so a New York accountant and a New York office manager are tested against different numbers. Second, California, Washington and Colorado index their thresholds to minimum wage or inflation, so the figures rise on January 1 each year, and Alaska's rises mid-year. Third, these states also apply stricter duties tests, and California requires more than half of working time to be spent on exempt duties. Fourth, some cities and counties set a higher local minimum wage, but the state exemption threshold is calculated on the state minimum wage, not the local one, in each of these states.

For the monitoring and recordkeeping rules that apply alongside these thresholds, see our guides to California, New York, Washington and Colorado.

What To Do When a Salary Falls Below the Threshold

An exempt employee whose salary is below the applicable threshold is misclassified from the first week it happens. The employer has three options, and should document whichever it chooses.

Option 1: Raise the salary. Simplest when the gap is small and the employee's duties clearly pass the duties test. Check the increase against internal equity, because raising one salary to the line often pulls others with it. In indexed states, build next January's increase into the budget now.

Option 2: Reclassify as non-exempt and pay overtime. Convert the salary to an hourly rate (annual salary divided by 2,080 for a 40-hour schedule) or keep the employee salaried non-exempt and pay overtime on top. Begin recording hours on the effective date. If the employee regularly works more than 40 hours, the overtime cost may exceed the cost of a raise, so model both.

Option 3: Reclassify and restructure the hours. Reclassify, then cap the schedule at 40 hours and redistribute work. This is the lowest-cost option on paper but only works if the workload genuinely fits 40 hours; otherwise unpaid off-the-clock work appears, which is a larger liability than the one being avoided.

Whatever the choice, the salary basis for the weeks already worked below the threshold cannot be repaired retroactively. Those weeks were non-exempt, and if the employee worked over 40 hours in any of them, overtime is owed. Reconstruct the hours as accurately as possible and pay the difference. Our guide to overtime calculation explains how to compute the regular rate for a salaried non-exempt employee.

A Payroll and HR Checklist for 2026

1. Pull every exempt employee's weekly salary and the state in which they work. Flag anyone below $684 federally or below the state figure in the six states above.
2. Check part-time exempt staff separately. A $60,000 full-time salary reduced to 60 percent for a part-time schedule is $692 a week, which clears the federal line but fails every state threshold in the table.
3. Review bonus-dependent salaries. If a salary only clears the federal threshold with the 10 percent bonus allowance, confirm the bonus is nondiscretionary, paid at least annually, and that a catch-up payment is made if it falls short.
4. Diary the state increases. California, Washington, Colorado and Maine change on January 1, 2027; Alaska changes on July 1, 2026 and again on July 1, 2027.
5. Document the duties test for every exempt role at the same time, because a salary review is the natural moment to revisit classification.
6. Set up hours tracking for any reclassified role before the effective date, and brief managers that partial-day deductions, which were prohibited for the exempt version of the role, are now permitted but must match the record.
7. Watch the Federal Register. A new DOL proposal would be published there first, with a comment period before any final rule.

Reclassification is a routine event, not a crisis, provided the hours record exists from the start. E-Monitor's attendance tracking records start and stop times, breaks and weekly totals automatically and flags hours over 40, so a role moved to non-exempt on Monday has a compliant FLSA record by Friday. For hourly and part-time teams, see our guide to monitoring part-time and hourly workers.

Related reading: How Many Work Hours Are in a Year?.

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