FLSA Exemptions Salary Threshold: What LLC Owners Must Know

If you have salaried employees, the FLSA exemptions salary threshold is the number that decides whether you owe them overtime — and after two years of legal back-and-forth, the federal figure is finally settled. For 2026, the standard salary floor to treat an executive, administrative, or professional employee as exempt is $684 per week ($35,568 per year). A 2024 rule that would have raised it sharply was struck down in court and has now been formally withdrawn.

The FLSA Exemptions Salary Threshold for 2026

The operative federal FLSA exemptions salary threshold is $35,568 per year ($684 per week) for the executive, administrative, and professional exemptions, plus a $107,432 total-annual-compensation threshold for highly compensated employees. These are the 2019 levels the Department of Labor (DOL) restored on May 14, 2026. For context on how big the reversal was, the vacated 2024 rule would have pushed the standard floor to $58,656 — roughly a 65% jump — so a large number of salaried roles briefly faced reclassification. To model how exempt-versus-non-exempt treatment affects your payroll budget, our LLC cost calculator estimates payroll and compliance costs across all 50 states.

Quick Answers on the 2026 Salary Threshold

What is the current FLSA salary threshold?

It is $684 per week, or $35,568 per year, for the executive, administrative, and professional exemptions. The highly compensated employee threshold is $107,432 per year. Meeting the salary number alone is never enough — the employee must also pass the duties test.

Are the 2024 increases gone for good?

Yes. A federal court in Texas vacated the entire 2024 rule on November 15, 2024, and the DOL’s May 14, 2026 technical amendment removed it from the regulations and dropped the related appeal. The $43,888 and $58,656 figures — and the automatic three-year increases — are off the table.

Does my state set a higher number?

Possibly. Several states require more than the federal floor, and you must follow whichever standard is more protective of the employee. California’s 2026 threshold, for example, is $70,304 per year.

FLSA Salary Threshold: How the Numbers Changed

Status	Annual Threshold	Weekly Threshold
2019 rule (restored, current)	$35,568	$684
2024 rule, July 1, 2024 (vacated)	$43,888	$844
2024 rule, Jan 1, 2025 step (vacated, never took effect)	$58,656	$1,128
Current federal standard (2026)	$35,568	$684

What This Means for Your LLC’s Payroll

For most small LLCs, the restored threshold simplifies things. When the 2024 rule briefly took effect, businesses had to either raise salaries above $43,888 to keep employees exempt or reclassify them as hourly and start tracking overtime. With the floor back at $35,568, employees who earn at least that much and meet the duties test can be treated as exempt again. Misclassification still carries real risk: the DOL can recover up to two years of back overtime (three for willful violations), plus an equal amount in liquidated damages, along with civil penalties and potential private lawsuits. The cleanest way to avoid that exposure is to base every exempt classification on both the current salary floor and a documented duties analysis.

The Five White-Collar Exemption Categories

Each exemption has its own duties test on top of the salary requirement:

• Executive: Primary duty is managing the business or a department, directing two or more employees, with authority (or meaningful input) over hiring and firing. Salary floor $684/week.
• Administrative: Primary duty is office or non-manual work tied to business operations, exercising discretion and independent judgment on significant matters. Same salary floor.
• Professional: Learned professionals (advanced knowledge in a field of science or learning) or creative professionals. Same salary floor.
• Outside Sales: Primary duty is making sales away from the employer’s place of business. This exemption has no salary threshold at all.
• Computer Employee: Systems analysts, programmers, software engineers, and similar roles. Can be met by the $684/week salary or an hourly rate of at least $27.63 per hour under federal law.

State Rules Can Be Higher — Check Yours

The federal floor is a floor, not a ceiling, and you must follow whichever standard protects the employee more. California is the clearest example: for 2026, its exempt salary threshold is $70,304 per year ($1,352 per week), calculated as twice the state’s $16.90 hourly minimum wage, and it applies to all employers with no employee-count distinction. California also sets higher floors for computer professionals ($58.85/hour) and licensed physicians ($107.17/hour). New York, Washington, Colorado, Alaska, and Maine likewise maintain elevated thresholds, and several adjust annually with their minimum wage. If you employ workers in any of those states, the federal $35,568 number is not the one that governs their classification.

Frequently Asked Questions

Do highly compensated employees use a different threshold?

Yes. The HCE exemption applies to employees earning at least $107,432 in total annual compensation (including at least $684 per week on a salary basis) who regularly perform at least one exempt duty. The 2024 rule’s proposed HCE increases to $132,964 and $151,164 were also vacated, so the operative figure is $107,432.

Do I have to reverse raises I gave to keep employees exempt in 2024?

No law requires you to cut salaries you raised in response to the 2024 rule. Whether to keep, adjust, or restructure them is a business decision; reducing pay is generally permissible with proper notice but carries employee-relations risk, so many employers keep increases for current staff and apply the restored federal threshold to new hires.

What is the safest way to handle borderline employees?

Employees earning between $35,568 and about $44,000 who were reclassified during the brief 2024 window are the highest-risk group. Confirm both their salary level and their actual day-to-day duties against the relevant exemption, document your reasoning, and check any applicable state threshold. For close calls, a quick review with an employment attorney is cheaper than a misclassification claim. This article is general information, not legal advice.