Overtime and exempt salary thresholds for employers in 2026
Under the federal Fair Labor Standards Act (FLSA), a covered employer must pay a non-exempt employee at least one and one-half times the regular rate for hours worked over 40 in a workweek. As of November 2026, the federal salary level for the executive, administrative and professional exemptions is $684 per week. Some states set higher salary thresholds or require overtime by the day.
Which states set a higher exempt salary threshold than the federal level?
As of November 2026, California, Colorado, New York and Washington each state an exempt salary threshold above the federal level, and the table below does not list every state. State law can set a higher exempt salary threshold or require overtime by the day, and the employer follows whichever rule is more favorable to the employee, so check the state labor agency for every state where employees work. The federal regulation says the FLSA provides minimum standards that may be exceeded, but cannot be waived or reduced.
As of November 2026, each figure below is the one the named state agency states.
State
Salary threshold as the state agency states it
Source
California
For occupations covered by Wage Order 4-2001, a monthly salary equivalent to no less than two times the state minimum wage for full-time employment, defined as 40 hours per week in Labor Code section 515(c). The state minimum wage is $16.90 per hour effective January 1, 2026.
Wage Order 4-2001 and DIR minimum wage FAQ
Colorado
For the executive, supervisor, administrative decision-maker and professional exemptions, at least $57,784 a year for 2026, paid as a salary and not an hourly wage or day rate. Future years are “Inflation-adjusted.”
Colorado INFO #1
New York
For executive and administrative employees, a weekly minimum ranging from $1,199.10 for employees in New York State to $1,275.00 for employees who work in Nassau, Suffolk and Westchester counties and in New York City for any size employer and fast food establishments, effective January 1, 2026.
NYS DOL minimum wage FAQ
Washington
For 2026, 2.25 times the state minimum wage of $17.13 an hour, or $1,541.70 a week, for small employers (1 to 50 employees) and large employers (51 or more). Effective January 1, 2027, small employers are at 2.25 times the state minimum wage, $1,595.70 a week, and large employers at 2.5 times, $1,773 a week, with a 2027 state minimum wage of $17.73 an hour.
Washington L&I
California has other wage orders, and its duties tests are separate from the salary test. The New York State Department of Labor says employers subject to state overtime requirements must pay time and a half to executive and administrative employees paid more than the federal level but less than the state minimum.
Who has to be paid overtime under federal law?
Under federal law, employees covered by the Fair Labor Standards Act must receive overtime pay for hours worked over 40 in a workweek unless they are exempt, as the DOL overtime page states. The statute sets that pay at not less than one and one-half times the regular rate, and the requirement may not be waived by agreement between the employer and the employee.
The FLSA exempts an employee employed in a bona fide executive, administrative or professional capacity, or as an outside salesperson, as DOL’s regulations define those terms, according to DOL’s May 2026 Federal Register notice. For the executive, administrative and professional exemptions, an employee generally must meet the duties test, be paid on a salary basis and be paid at least the salary level, and a job title alone does not establish exempt status.
How do I calculate overtime for hourly employees?
For an hourly employee, pay the regular hourly rate for the first 40 hours of the workweek and at least one and one-half times that rate for each hour over 40, as the examples in 29 CFR 778.110 show.
Hypothetical example. An employee paid $12 an hour works 46 hours in one workweek. The 40 regular hours pay 40 x $12 = $480. The 6 overtime hours pay 6 x $18 = $108, because the overtime rate is 1.5 x $12 = $18. The total is $480 + $108 = $588.
For 2026 wages, Form W-2 box 12 code TT reports the total amount of qualified overtime compensation, which is only the “half” portion of time-and-a-half pay, according to the IRS instructions for Forms W-2 and W-3.
How do I calculate overtime for a salaried non-exempt employee?
For a non-exempt employee paid only a salary, the regular rate is the salary divided by the number of hours the salary is intended to compensate, and the employee receives one and one-half times that rate for hours over 40, as 29 CFR 778.113 states. A monthly salary is reduced to its workweek equivalent by multiplying by 12 and dividing by 52, and a semimonthly salary by multiplying by 24 and dividing by 52.
Hypothetical example applying the 29 CFR 778.113 method. A non-exempt employee hired at $350 a week for an understood 35-hour workweek has a regular rate of $350 / 35 = $10.00 an hour. In a week of 43 hours, the first 40 hours pay 40 x $10.00 = $400.00 and the 3 hours over 40 pay 3 x $15.00 = $45.00, because 1.5 x $10.00 = $15.00. The total is $445.00.
What is the regular rate of pay, and do bonuses change it?
The regular rate is the employee’s total remuneration for employment in the workweek, less the exclusions the statute lists, divided by the hours actually worked in that workweek, as 29 CFR 778.109 states. 29 U.S.C. 207 says the regular rate includes all remuneration for employment except eight listed categories, among them gifts not measured by hours, production or efficiency, pay for occasional periods when no work is performed, reasonable reimbursed expenses, discretionary bonuses, and premium pay for hours over eight in a day or over the maximum workweek.
A bonus that does not qualify for a statutory exclusion must be totaled in with other earnings to determine the regular rate. A bonus is discretionary, and so excluded, only if the employer keeps discretion over both the fact and the amount until at or near the end of the period and has made no prior promise, under 29 CFR 778.211. Most attendance, production and quality bonuses, and bonuses contingent on staying to the payment date, are in the regular rate, as are announced bonuses to induce steadier or faster work, and the label does not decide it.
Hypothetical example. An employee paid $20 an hour works 45 hours and earns a $90 attendance bonus announced in advance. Straight-time pay is 45 x $20 = $900, and adding the bonus gives $990. The regular rate is $990 / 45 = $22.00, so the overtime premium is 5 x $11.00 = $55.00. The total is $990 + $55 = $1,045.00.
What is the federal salary threshold for exempt employees in 2026?
As of November 2026, the federal salary level for the executive, administrative and professional exemptions is $684 per week, which is $35,568 per year for a full-year worker, and the highly compensated employee test requires total annual compensation of at least $107,432, including at least $684 per week paid on a salary or fee basis.
The $684 level is met by pay of at least $1,368 biweekly, $1,482 semimonthly or $2,964 monthly. For employers other than the federal government, the level is $455 per week in the Northern Mariana Islands, Guam, Puerto Rico and the U.S. Virgin Islands and $380 per week in American Samoa. Up to 10 percent of the $684 weekly level, which is $68.40 a week, can be met with nondiscretionary bonuses, incentives and commissions paid annually or more frequently, under 29 CFR 541.602, for the standard salary level but not the HCE test.
DOL’s Federal Register notice says the salary basis and salary level tests do not apply to doctors, lawyers, teachers and outside sales employees. DOL’s salary levels page lists the $684 and $107,432 levels and $27.63 an hour for computer employees paid hourly.
What happened to the 2024 overtime rule, and has DOL proposed a new salary level?
The Department of Labor’s 2024 rule, which would have raised the salary level to $844 per week and then $1,128 per week, was vacated by two federal courts, and in May 2026 DOL republished the pre-2024 regulation text. The Eastern District of Texas vacated the rule on November 15, 2024, and the Northern District of Texas on December 30, 2024, according to DOL’s May 2026 Federal Register notice.
On May 15, 2026, DOL published a technical amendment, effective that day, that removed the vacated 2024 text from the Code of Federal Regulations and republished the pre-2024 text, including the $684 per week level and the $107,432 highly compensated employee level.
As of November 2026, DOL has published no proposal to change the $684 level. The Federal Register’s listing of Wage and Hour Division documents from January 1, 2025 shows the technical amendment as the only part 541 document, and DOL’s regulatory agenda published August 14, 2026 lists the part 541 rulemaking only under completed actions. The May 2026 notice says the amendment does not foreclose future notice and comment rulemaking.
Does paying a salary make an employee exempt?
For the executive, administrative and professional exemptions, paying an employee a salary does not by itself make the employee exempt, because the duties test also applies, under 29 CFR 541.2. That regulation says “A job title alone is insufficient to establish the exempt status of an employee.”
An employee is paid on a salary basis if the employee regularly receives each pay period, on a weekly or less frequent basis, a predetermined amount constituting all or part of the employee’s compensation, and that amount is not reduced for variations in the quality or quantity of work, under 29 CFR 541.602.
What duties must executive, administrative and professional employees perform?
Each of the executive, administrative and professional exemptions has its own duties test, which applies together with the salary requirements.
* Executive. The employee’s primary duty is management of the enterprise or of a customarily recognized department or subdivision, the employee customarily and regularly directs the work of two or more other employees, and the employee has authority to hire or fire or has recommendations on hiring, firing, advancement, promotion or any other change of status given particular weight (29 CFR 541.100).
* Administrative. The employee’s primary duty is office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers, and that duty includes the exercise of discretion and independent judgment with respect to matters of significance (29 CFR 541.200).
* Professional. The employee’s primary duty is work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction, or work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor (29 CFR 541.300).
Primary duty means the principal, main, major or most important duty. Employees who spend more than 50 percent of their time on exempt work will generally satisfy the requirement, and time is not the sole test.
What is the highly compensated employee test?
As of November 2026, the highly compensated employee (HCE) test requires total annual compensation of at least $107,432, including at least $684 per week paid on a salary or fee basis, and an employee who meets it and whose primary duty includes office or non-manual work is exempt if the employee customarily and regularly performs any one or more of the exempt duties of an executive, administrative or professional employee, under 29 CFR 541.601.
Total annual compensation is measured over a 52-week period, which is the calendar year unless the employer identifies another year in advance. It may include commissions and nondiscretionary bonuses but excludes board, lodging, medical and life insurance payments, retirement contributions and other fringe benefits. Production-line workers and non-management maintenance, construction and similar employees, such as carpenters, electricians, mechanics, plumbers and laborers, are not exempt under the HCE test no matter how highly paid they might be.
Can I deduct from an exempt employee’s salary without losing the exemption?
An employer can deduct from an exempt employee’s salary in the situations 29 CFR 541.602 lists, but an employee is not paid on a salary basis if deductions are made for absences occasioned by the employer or by the operating requirements of the business. An exempt employee must receive the full salary for any week in which any work is performed, regardless of days or hours worked, subject to the listed exceptions. The permitted deductions include these.
* Full-day absences for personal reasons other than sickness or disability.
* Full-day sickness or disability absences under a bona fide plan, policy or practice.
* Good-faith penalties for major safety rule infractions, in any amount.
* Unpaid disciplinary suspensions of one or more full days under a written policy that applies to all employees.
* Proportionate pay for the first and last week of employment.
* Proportionate pay for time actually worked when an exempt employee takes unpaid FMLA leave.
Which states require overtime by the day?
Federal law does not generally require overtime for hours over eight in a day, but some states do. Under 29 CFR 778.102, the Act does not relieve an employer of any obligation under other federal or state law to pay premium rates for work in excess of a daily standard.
As of November 2026, each rule below is the one the named state agency states.
State
Daily overtime rule as the state agency states it
Source
California
A nonexempt employee may not be employed more than eight hours in any workday or more than 40 hours in a workweek without one and one-half times the regular rate, which applies to hours over eight up to and including 12 in a workday and to the first eight hours on the seventh consecutive day of work in a workweek. Double the regular rate applies to hours over 12 in a workday and over eight on the seventh consecutive day.
DIR overtime FAQ
Colorado
One and one-half times the regular rate for hours past 40 per week, 12 per day or any 12 consecutive hours, whichever results in higher pay.
Colorado INFO #1
Alaska
More than 8 hours in a single day or more than 40 hours in a single week is paid at 1.5 times the hourly or regular wage, with a few exceptions. An employer with a total of three employees or fewer can pay straight time, and overtime applies at a total of four or more employees.
Alaska wage and hour FAQ
Washington
Washington law does not require overtime for hours worked over 8 hours in a day, except on certain public works projects. For most employees, overtime is at least 1.5 times the regular rate for hours over 40 in a 7-day workweek.
Washington L&I
California’s DIR says exemptions and exceptions apply to its daily rule, for example alternative workweek schedules. The table does not list every state.
What is a workweek, and can I average hours over two weeks?
A workweek is a fixed and regularly recurring period of 168 hours, meaning seven consecutive 24-hour periods, under 29 CFR 778.105, and under 29 CFR 778.104 the Act does not permit averaging hours over two or more weeks, apart from statutory alternatives such as the 14-day work period that hospitals and residential care establishments may use by agreement with the employee under 29 U.S.C. 207(j). The workweek may begin on any day and hour, and once set it stays fixed unless the change is meant to be permanent and not designed to evade overtime.
The employer owes overtime for the hours beyond 40 in the second week when an employee works 30 hours one week and 50 hours the next, although the two-week average is 40 hours.
Can I give comp time instead of overtime pay?
Federal law lets public agencies, but not private employers, give compensatory time off in place of overtime pay, and DOL says the overtime pay requirement cannot be met through the use of compensatory time off except under special circumstances applicable only to state and local government employees.
Washington L&I says only public employees are eligible for time off instead of overtime and that private employers cannot enter into these agreements. Colorado’s INFO #1 says employers can’t give time off instead of time-and-a-half overtime pay. The Alaska Department of Labor and Workforce Development says comp time instead of overtime wages is not lawful in Alaska.
When do I have to pay overtime?
Overtime earned in a workweek is generally paid on the regular payday for the pay period in which that workweek ends, and federal law does not require that overtime be paid weekly, under 29 CFR 778.106. If the amount cannot be determined until later, the employer pays as soon after the regular pay period as is practicable, and must pay no later than the next payday after the computation can be made.
Do I owe overtime for work employees do without approval?
Hours worked include work the employer did not request but suffered or permitted, so time spent on work the employer knows or has reason to believe is being performed counts as working time, including work away from the premises or at home, under 29 CFR 785.11 and 785.12. Management must see that unwanted work is not performed, and under 29 CFR 785.13 the mere promulgation of a rule against such work is not enough.
What overtime records do I have to keep?
Each employer must keep payroll or other records for each employee to whom section 6 or both sections 6 and 7(a) of the FLSA apply, and 29 CFR 516.2 lists what they must show. The overtime-related items include the day and time the workweek begins, the regular hourly rate for any workweek in which overtime is due, the basis of pay, each payment excluded from the regular rate, hours worked each workday and each workweek, total straight-time earnings, total premium pay for overtime hours, additions to and deductions from wages, total wages paid each pay period, and the date of payment and pay period covered.
Payroll records and certain agreements must be kept for at least 3 years under 29 CFR 516.5. Time cards and wage-rate tables, including daily starting and stopping times, must be kept for at least 2 years under 29 CFR 516.6. DOL’s Handy Reference Guide says records need not be kept in any particular form and time clocks need not be used.
What happens if I treat an employee as exempt and get it wrong?
An employer that does not pay required overtime to an employee who is not exempt is liable to the affected employees for their unpaid overtime compensation and an additional equal amount as liquidated damages, under 29 U.S.C. 216. The court also allows a reasonable attorney’s fee and costs to the plaintiff.
An action to recover unpaid overtime may be commenced within two years after the cause of action accrued, or within three years for a willful violation.
As of November 2026, any person who repeatedly or willfully violates the overtime requirement is subject to a civil penalty of not more than $2,515 for each violation under 29 CFR 579.1. In setting the amount, DOL considers the size of the business and the gravity of the violation.
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