Federal Overtime Exemption Threshold (FLSA)
Under the Fair Labor Standards Act (FLSA), employees must meet both the salary basis test and the duties test (Executive, Administrative, Professional – EAP, or Highly Compensated Employee) to qualify as exempt from overtime.
Standard EAP Exemption Threshold
The federal salary exemption threshold in the United States is:
$35,568 per year
Equivalent to $684 per week
Employees earning below $35,568 annually ($684 per week) are classified as non‑exempt and are therefore entitled to overtime pay for:
Any hours worked over 40 hours per week
In California, overtime also applies for hours worked over 8 hours per day, in accordance with state law
Meeting the salary threshold alone is not sufficient — the employee must also satisfy the applicable duties test under FLSA regulations.
Highly Compensated Employee (HCE) Exemption Threshold
The annual salary threshold for the Highly Compensated Employee (HCE) exemption is $107,432 per year
Employees earning below this amount do not qualify for the HCE exemption and may therefore be entitled to overtime, even if performing exempt duties.
For current state-specific minimum wage requirements, please refer to: https://www.dol.gov/agencies/whd/minimum-wage/state
For further guidance on federal wage and hour compliance: https://www.dol.gov/agencies/WHD/about
Source: https://resources.pgcgroup.com/north-america-employment-compliance-updates/?nocache=1&utm_campaign=Direct_Client_-_End_of_Year_Email_2025&utm_medium=email&utm_source=bulk_email&utm_id=410598&_fm_st=A60E8E245618F356F18C46DB8C96D4C1997500EEBA36349646BDA522D1322009AFFB024A46648E45EECF4DC446A0A0D0#US-Employment-Compliance-Updates-2025:~:text=Highly%20Compensated%20Exemption,of%20%24132%2C964%20annually.