Exempt vs. non-exempt: are you owed overtime?

Being paid a salary does not make you exempt from overtime. A surprising number of employers either don't know this or count on you not knowing it.

This is the most consequential thing on your pay stub that nobody explains to you.

If you are non-exempt, federal law requires your employer to pay at least 1.5× your regular rate for every hour over 40 in a workweek. If you are exempt, it doesn't. That single classification can be worth tens of thousands of dollars a year, and it is decided by a legal test — not by your title, not by whether you get a salary, and not by what your offer letter asserts.

The three-part test

To be exempt under the federal white-collar ("EAP") exemptions — executive, administrative, professional — all three of these must be true. Fail one and you are non-exempt.

1. The salary basis test

You receive a predetermined, fixed amount each pay period that doesn't fluctuate based on the quality or quantity of your work. If your pay gets docked when you work fewer hours, that undercuts salary basis — and can break the exemption entirely.

2. The salary level test

You must earn at least a minimum weekly salary. As of 2026 the federal floor is $684 per week — $35,568 a year.

That number has a messy recent history worth knowing. In 2024 the Department of Labor issued a rule raising the threshold substantially. A federal court in Texas vacated that rule in November 2024, and in May 2026 the DOL formally restored the 2019 level of $684/week. So the higher figures you may have read about in 2024 news coverage never took lasting effect. There is also a separate "highly compensated employee" path at $107,432 in total annual compensation.

3. The duties test

This is the one employers get wrong most often. Your actual primary duties must genuinely be executive, administrative, or professional:

• Executive: you primarily manage the business or a department, regularly direct at least two full-time employees, and have real authority over hiring and firing (or your recommendations carry genuine weight).
• Administrative: your primary duty is office or non-manual work directly related to management or general business operations, and it includes the exercise of independent judgment on significant matters. That last clause is doing enormous work. Following a detailed script or checklist is not independent judgment.
• Professional: work requiring advanced knowledge in a field of science or learning, typically acquired through prolonged specialized instruction — or genuine creative/artistic work.

Job titles are legally irrelevant. Calling someone an "Assistant Manager," a "Coordinator," or a "Specialist" changes nothing if the day-to-day work doesn't clear the duties bar.

Your state may set a higher bar

Where state law is more protective than federal law, state law wins. Several states have exempt salary floors far above the federal $684/week. In 2026:

The practical consequence: the same salary can make you exempt in one state and non-exempt in another. A $60,000 salary clears the federal bar comfortably. In Washington, it doesn't come close — and that worker is owed overtime.

Signs you may be misclassified

None of these is proof. Together, they're a reason to look closely.

• You're salaried but your pay gets docked for partial-day absences or slow weeks.
• Your title says manager, but you spend most of your time doing the same work as the people you supposedly manage — running the register, stocking, driving, answering tickets.
• You have no real authority: you can't hire, can't fire, can't set schedules, and your recommendations don't meaningfully influence those decisions.
• Your work is tightly scripted, with little independent judgment on matters of significance.
• You earn a salary below the applicable threshold — federal or, crucially, your state's higher one — and you get no overtime.
• You were reclassified from hourly to salary, your duties didn't change, and the overtime stopped.

That last one is worth its own sentence. Converting an hourly worker to salary without a genuine change in duties, specifically so overtime stops being paid, is a classic misclassification pattern.

What misclassification is actually worth

Suppose you're paid $52,000 as an exempt "supervisor," and you work 48 hours most weeks. Your regular rate works out to $25 an hour. Those eight extra hours, at time-and-a-half, would be $300 a week. Over a year, that's roughly $15,600 in unpaid overtime.

Under the FLSA the standard lookback for recovering unpaid overtime is two years — three if the violation is found to be willful. The exposure is not trivial, for you or for the employer.

What to do about it

1. Write down your hours. Start today, keep it contemporaneous, keep it somewhere your employer can't delete. If there is ever a dispute and the employer's records are inadequate, a worker's own credible records carry real weight.
2. Check your state's rules, not just the federal ones. Your state labor department publishes the thresholds and duties tests.
3. Consider raising it internally first. Sometimes it's an honest payroll error and it gets fixed quietly.
4. File a complaint if it isn't fixed. The U.S. Department of Labor's Wage and Hour Division investigates FLSA complaints at no cost to you, and many state agencies do the same. Retaliating against an employee for filing is itself illegal.
5. Talk to an employment attorney if the amounts are significant. Many take wage claims on contingency, and the FLSA provides for the recovery of attorney's fees for prevailing employees.

Run your own numbers in the calculator — set your real hours per week and see what your effective hourly rate actually is. If the gap between that and your nominal rate is large, and you're not being paid overtime, the classification question is worth taking seriously.

This is general information, not legal advice, and employment law changes frequently. Exemption analysis is fact-specific — two people with the same job title can be classified differently. For advice on your situation, consult a licensed employment attorney or your state labor agency.

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