What Is a Required Salary Under Federal Overtime Law?

A manager is preparing an offer letter for a new team lead. The role is salaried, the candidate will supervise work, and everyone assumes that means overtime will not apply. Then someone asks a simple question: "Is the salary high enough to make this position exempt?" This is a common, composite scenario, not a specific case. The answer is not as simple as picking a yearly number that feels competitive. Pay, job duties, pay method, and the rules that apply to the worker all matter. An employee can have a professional title and receive the same paycheck every two weeks, yet still not qualify as exempt from overtime.

In U.S. employment-law conversations, a required salary usually means the minimum salary an employee must receive to meet one part of an overtime-exemption test. It is not a universal minimum salary for every job, and meeting it does not by itself make someone exempt.

The federal meaning of "required salary"

Under the federal Fair Labor Standards Act (FLSA), many employees classified as exempt under the executive, administrative, or professional exemptions generally must be paid:

• On a salary basis; and
• At least $684 per week.

That weekly amount equals $35,568 per year when paid for 52 weeks. The U.S. Department of Labor identifies $684 per week as the general federal salary level for these exemptions. Its Fact Sheet #17G explains the salary-basis requirement and Part 541 exemptions.

For many white-collar exemptions, employers must satisfy three things at once: the salary-basis requirement, the salary-level requirement, and a duties test tied to the specific exemption. Paying the required salary is necessary, but it is only one piece of the analysis.

Duties matter as much as the paycheck

A common misunderstanding is that any employee paid a salary is automatically exempt from overtime. That is not how the classification analysis works. Giving someone a manager title does not by itself establish that the person performs qualifying executive work.

For the executive exemption, the employee generally needs real authority over other workers, such as directing their daily tasks and having meaningful input into hiring, firing, or promotion decisions, not just a supervisory title on an org chart. For the administrative exemption, the work usually needs to involve independent judgment on significant business matters, like setting policy or resolving disputes, rather than following a fixed script or checklist. For the professional exemption, the role typically requires advanced knowledge in a field of science or learning, usually gained through specialized education, not simply years of on-the-job experience.

A worker who supervises two people but spends most of the day doing the same production work as the team may not meet the executive duties test, even at a salary above $684 per week. A worker with real decision-making authority over budgets or vendor contracts may meet the administrative duties test even without a formal management title. Day-to-day responsibilities, not job titles, decide the outcome.

What does "salary basis" mean?

Being paid on a salary basis generally means receiving a predetermined amount of pay each pay period rather than having pay fluctuate solely with the number of hours worked. This differs from simply converting an hourly wage into an annual figure. An employee may earn more than $35,568 annually but still not meet the salary-basis requirement if the payment arrangement does not fit the applicable rules, including improper deductions for partial-week absences.

The current federal threshold

As of the provided 2026 Department of Labor materials, most exempt executive, administrative, and professional employees must receive at least $684 per week. The Department of Labor also announced in May 2026 that restored regulations retained that salary level. The Department's announcement is available here.

The same announcement states that certain highly compensated employees are subject to a total annual compensation threshold of $107,432. Highly compensated employee rules are more specialized, so reaching that total-compensation figure alone does not settle the classification question.

A salary threshold can change through future regulations or legal developments. Employers should use current official guidance rather than an old handbook, template, or job posting.

Employees who may be treated differently

The federal salary requirement does not apply the same way to every occupation. According to the Department of Labor's guidance, the general salary requirements above do not apply to:

• Outside sales employees
• Teachers
• Employees practicing law
• Employees practicing medicine

Exempt computer employees may qualify when paid at least $684 per week on a salary basis or when paid hourly at not less than $27.63 per hour. See the Department of Labor's Fact Sheet #17G for these distinctions. These exceptions show why a single required-salary number cannot be applied blindly across an organization.

Federal requirements are not the whole review

The FLSA sets a federal floor, but employers may also need to account for state or local wage-and-hour rules. A rule tied to where the employee works can affect the salary level or classification standard that applies. The provided context here does not include state-specific thresholds. Organizations with workers in more than one location should evaluate each role against the rules for that worker's actual work location rather than assuming the federal figure resolves everything.

This matters most for remote teams. A manager may work in one state, payroll may run in another, and the employee may work from a third. The worker's actual location is a key detail to confirm.

Why the required salary matters

Exempt and nonexempt classifications affect overtime eligibility and payroll practices. When a role is properly nonexempt, employers need reliable time-tracking and overtime processes. When a role is exempt, the employer should be able to point to a clear analysis of pay method, pay level, and duties.

Getting this wrong has real consequences: misclassified employees may be owed back overtime pay, and payroll systems built on the wrong classification can compound the error across every pay period until someone catches it.

A practical review checklist

• Confirm the employee's actual daily duties, not just the job title.
• Verify the pay is a predetermined salary, not hours converted into an annual number.
• Check that the weekly salary meets or exceeds $684, or identify the applicable exception.
• Reassess after a promotion, relocation, or change in responsibilities.
• Keep documentation of job descriptions, pay records, and the classification reasoning.

The bottom line

A required salary is the minimum pay needed to satisfy part of a federal overtime-exemption test. For many exempt executive, administrative, and professional employees, the current federal level is $684 per week, or $35,568 annually. Meeting that number alone does not make an employee exempt: the salary basis and the actual duties must also fit the exemption.

Employees unsure about their classification can ask their employer how the role is classified and why. For organization-specific decisions, a qualified employment-law professional can evaluate the facts of a particular role.

Informational note: This article is provided for general informational purposes only and is not legal advice. It does not represent the advice or opinion of the website or organization on which it appears.