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Overtime Rules for Exempt and Non-Exempt Employees: What the FLSA Requires

Covered nonexempt employees generally earn at least 1.5 times their regular rate for hours over 40 in a workweek. Exemption depends on the applicable duties and compensation tests, not a title or salary alone.
From TheFinanceBase Team5 min to read
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Under the federal Fair Labor Standards Act (FLSA), covered nonexempt employees generally must receive at least 1.5 times their regular rate for hours worked over 40 in a workweek. Exempt employees are not entitled to FLSA overtime only when they meet the requirements of an applicable exemption. A salary or job title alone does not make an employee exempt.

As of October 8, 2026, the U.S. Department of Labor (DOL) says it is enforcing the restored 2019 federal thresholds for the common white-collar exemptions: $684 per week for the standard salary test and $107,432 in annual compensation for the highly compensated employee test. Duties and other requirements still apply, and state or local law may provide greater protection.

What “exempt” and “nonexempt” mean

“Nonexempt” means an employee is covered by the FLSA’s minimum-wage and overtime protections unless a separate rule applies. “Exempt” means a specific statutory exemption removes some or all of those protections. For the common executive, administrative, and professional exemptions, the employer generally must satisfy duties and compensation requirements; paying someone a salary is not enough. The DOL’s January 2026 opinion letter explains that salary basis alone does not establish exemption.

An employer may classify an employee who could qualify for an exemption as nonexempt and pay overtime. Conversely, a worker’s title, annual pay, or the fact that the worker supervises others does not establish exemption if the applicable legal test is not met.

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How federal overtime works for nonexempt employees

The 40-hour workweek

For a covered nonexempt employee, federal overtime is generally due for hours worked above 40 in a fixed, recurring workweek of 168 hours. The employer may set the workweek’s start and end, but cannot average hours across two or more workweeks to avoid overtime. Working 30 hours in one week and 50 in the next does not make the second week a 40-hour week.

The regular rate—not always just the base hourly wage

The overtime rate is at least 1.5 times the employee’s regular rate. The regular rate generally reflects includable compensation for the workweek divided by hours worked, after legally permitted exclusions. Depending on the pay arrangement, compensation beyond the stated hourly wage can affect the calculation. The DOL explains the calculation and exclusions in Fact Sheet #56A.

Employers must keep required wage and hour records. A time clock or other timekeeping system may help capture hours, but the cited DOL guidance does not require a particular device.

Which employees may qualify for a common white-collar exemption?

The standard executive, administrative, and professional exemptions require the employee’s actual primary duties to satisfy the relevant test, along with applicable salary-basis and salary-level conditions. “Primary duty” is evaluated from the job as a whole; time spent on exempt tasks may be relevant but is not the sole measure.

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Executive employees

The employee’s primary duty must be management of the enterprise or a recognized department or subdivision. The employee must customarily and regularly direct at least two full-time employees or their equivalent, and have qualifying authority over hiring or firing—or recommendations on those actions that receive particular weight. See the DOL’s executive exemption guidance.

Administrative employees

The primary duty must be office or nonmanual work directly related to management or general business operations of the employer or its customers. The employee must also exercise discretion and independent judgment on matters of significance. A role involving routine office work does not qualify on that fact alone. See the DOL’s administrative exemption guidance.

Learned professionals

The primary duty must involve work requiring advanced knowledge in a field of science or learning, customarily acquired through prolonged specialized intellectual instruction. A degree or professional license by itself does not establish that the employee’s actual work meets this test. See the DOL’s professional exemption guidance.

Highly compensated employees

The HCE exemption has a separate total-compensation threshold and a less demanding duties test than the standard white-collar tests. The employee must perform office or nonmanual work and customarily and regularly perform at least one exempt executive, administrative, or professional duty. Under the DOL’s current enforcement position, total annual compensation must be at least $107,432, including at least $684 per week paid on a salary or fee basis. See the DOL’s HCE guidance and current rulemaking FAQ.

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Occupations with special rules

Computer employees, outside sales employees, teachers, and certain licensed professionals can be subject to different requirements, including exceptions to the standard salary-level test. Check the occupation-specific rule rather than assuming the general salary threshold applies. The DOL’s overtime fact-sheet index links to guidance for these categories.

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Current federal salary thresholds—and why older figures appear online

As of October 8, 2026, the DOL says it is enforcing the 2019 regulatory thresholds: $684 per week for the standard salary-level test and $107,432 per year in total compensation for the HCE test. These amounts do not, by themselves, make an employee exempt; the applicable duties and salary-basis rules remain part of the analysis.

The 2024 overtime rule scheduled the standard salary level to rise to $844 per week on July 1, 2024, and $1,128 per week on January 1, 2025, with higher HCE levels. A federal district court vacated that rule on November 15, 2024. The DOL’s current FAQ states that it is applying the 2019 thresholds for enforcement, and its May 14, 2026 technical amendment announcement describes restoration of the operative 2019 regulatory text. The vacated $844 and $1,128 figures are not the DOL’s current enforcement standards.

Salary basis: what it does and does not establish

Salary basis generally means a predetermined amount paid each pay period that is not reduced because of variations in the quality or quantity of the employee’s work. Subject to defined exceptions, an exempt employee must receive the full salary for any week in which the employee performs work. An actual practice of improper deductions can jeopardize the exemption. Salary basis is only one part of the test; it does not replace the duties or salary-level requirements. See the DOL’s salary-basis guidance.

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How to check a classification

  1. Identify the work location. Find the state and local rules that apply. The FLSA is a federal baseline; where federal and state standards both apply, the employee is entitled to the higher standard, according to the DOL’s FLSA FAQ.
  2. Confirm coverage and the claimed exemption. Ask whether the FLSA covers the employee and which specific exemption the employer relies on. Do not infer exemption from a title or salary alone.
  3. Compare actual primary duties with the full test. Use the applicable executive, administrative, professional, HCE, or occupation-specific criteria rather than a broad label such as “manager” or “professional.”
  4. Check compensation requirements. Verify salary basis and the threshold that applies under the DOL’s current enforcement position, or the different rule for an occupation-specific exemption.
  5. For nonexempt work, total hours and includable compensation by workweek. Calculate overtime using the regular rate, pay the required premium, and keep the necessary time and wage records.

For mixed-role positions, the facts matter. In a May 2026 opinion letter, the DOL concluded that a nursing professional development specialist could take some additional hourly staff-nurse shifts and remain exempt on the facts presented because the primary duty remained exempt work and salary conditions continued to be met. That fact-specific conclusion is not a blanket rule for employees who perform both exempt and nonexempt tasks. See Opinion Letter FLSA2026-5.

Federal guidance to consult

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