You get overtime unless your employer proves you don't. That has been the default under federal law since October 24, 1938, when the Fair Labor Standards Act created the 40-hour workweek and the time-and-a-half mandate during the Great Depression. The law was built to spread available work across more people and stop companies from running staff into the ground. Congress patched it in 1961, 1966, and 1974, and the Department of Labor has rewritten the salary thresholds repeatedly since 2004. The core bargain never changed: one category of worker gets 1.5x after 40 hours. The other gets nothing extra, no matter how late they stay.
The line between those two categories is where payroll budgets break and wage claims begin.
The three tests that decide your status
To classify someone as exempt, an organization must satisfy every one of these tests. Fail one, and the worker is non-exempt. Job titles and offer letters count for nothing. Only the actual work arrangement matters.
Salary basis: your pay can't bounce around
The salary basis test demands a predetermined weekly amount that does not shrink because the work was slow or a deadline slipped. Work 20 hours, work 60 hours: the base pay stays fixed. Docking pay for a partial-day absence, reducing a salary when projects dry up, or forcing an employee to burn sick leave when they are ready to work can all break the salary basis rule. An organization that does this often enough can lose the exemption for an entire group, not just the one person it shorted.
Narrow exceptions exist. A smaller paycheck is allowed during the first and last weeks of employment, for full-day personal absences beyond accrued leave, or during jury duty weeks. Those are carve-outs, not a licence to trim.
Salary level: the number that keeps moving
The salary level test is arithmetic. As of July 2024, the federal threshold set by the Department of Labor is $844 per week. That annualizes to $43,888. Earn less, and you are automatically non-exempt regardless of what your duties say.
This figure has been a political football for two decades. The 2004 Bush administration overhaul pegged the threshold at $455 per week. The Obama administration tried to lift it to $47,476 per year in 2016; a federal court blocked the rule. The Trump administration raised it to $35,568 per year in 2019. The Biden DOL pushed it to $43,888 in July 2024 and scheduled a second jump to $58,656 for January 2025. That second increase has been challenged in court. Before relying on any threshold, pull the current number from the Department of Labor's Wage and Hour Division site or ask an employment lawyer. Do not assume last year's exempt status still holds.
Duties: what you actually do all day
The duties test is where classification gets slippery. Your primary duties must fit one of these buckets.
Executive. You manage the enterprise or a recognised subdivision. You regularly direct at least two full-time staff and have authority to hire, fire, or meaningfully recommend those actions. Covering a shift on the register occasionally is fine. Spending most of your time doing the same work as the people you supervise is not.
Administrative. You do office work directly related to management or general business operations, and you exercise discretion and independent judgment on significant matters. HR managers, financial analysts, and compliance officers often qualify. Someone who follows a script and never makes a meaningful decision does not.
Professional. Learned professionals apply advanced knowledge in a field of science or learning, typically needing a degree. Creative professionals work in a recognised artistic field where the output is invention, imagination, or original talent. The boundaries around creative roles are heavily litigated.
Computer-related. Systems analysts, software engineers, and programmers whose primary duties involve applying systems analysis techniques, designing or developing programs, or testing them. The DOL requires either the salary threshold or an hourly rate of at least $27.63. Check the Wage and Hour Division site for the current computer exemption rate before classifying anyone under it.
Outside sales. Your primary duty is making sales or obtaining orders away from the organisation's place of business. This is the only exemption with no salary requirement at all.
Highly compensated: a shortcut through the duties test
A worker who earns at least $132,964 per year as of 2024 can qualify as exempt under a lighter duties standard. The test: the primary duty involves office or non-manual work, and the person customarily and regularly performs at least one exempt duty from the executive, administrative, or professional categories. That is a lower bar. The worker does not need to spend most of the day on exempt tasks, only to perform some exempt work regularly.
The salary floor is high and the DOL adjusts it. If an organisation claims someone earning $60,000 is exempt because they are "highly compensated," the classification is wrong.
Blue-collar and first responders: never exempt
Manual labourers, mechanics, electricians, carpenters, plumbers, ironworkers, and anyone performing hard physical labour are always non-exempt. So are police officers, firefighters, paramedics, and EMTs. Paying a firefighter a six-figure salary does not make them exempt. The FLSA regulations are explicit: these staff sell their physical effort and presence, not their judgment. A job title that says "manager" means nothing if the person spends the day on a production line.
When the classification is wrong
Misclassifying a non-exempt worker as exempt triggers steep liability. The FLSA lets employees recover unpaid overtime for up to two years, or three years for wilful violations, plus an equal amount in liquidated damages. That effectively doubles the back pay. Courts can also award attorney's fees and costs.
The DOL's Wage and Hour Division has pursued organisations for millions in back wages, and misclassification sits on its strategic enforcement priority list. Independent-contractor misclassification piles on state tax and unemployment insurance exposure.
What to do now
Assume you are non-exempt until the organisation proves otherwise. The tests are narrow and the burden sits with the organisation, not with you.
If you think your classification is wrong, document four things: your actual daily duties, your pay records, your hours, and any written communication about your status. Then get a wage-and-hour attorney or file a complaint with the Department of Labor.
For anyone who is non-exempt and working more than 40 hours, run the numbers. A $15 hourly rate with 45 hours in the week produces 40 regular hours at $600.00 plus 5 overtime hours at $22.50, totalling $712.50. At 50 hours the total reaches $825.00. A $20 hourly rate with a 50-hour week comes to $1,100.00. At $25 an hour, 45 hours yields $1,187.50. At $35 an hour, a 60-hour week hits $2,450.00. Use the overtime calculator to check your own pay stub, and read overtime pay for salaried employees if your situation crosses the salary-hourly line.
State rules that override the federal baseline
Federal law sets the floor. Several states have built a higher ceiling.
California
Daily overtime kicks in after 8 hours at 1.5x, and after 12 hours at 2x. Weekly overtime still applies after 40 hours. A seventh consecutive day pays 1.5x for the first 8 hours and 2x beyond that. Alternative workweek schedules such as 4/10 are permitted only with an employee vote. Agricultural workers are being phased into the 40-hour threshold under AB 1066; as of 2022 the threshold was 40 hours for employers with 26 or more employees. Contact the California Division of Labor Standards Enforcement for the current phase-in schedule.
Alaska
Overtime is due after 8 hours in a day at 1.5x, and after 40 hours in a week. Confirm current double-time provisions with the Alaska Department of Labor and Workforce Development.
Nevada
Workers earning less than 1.5 times the state minimum wage receive daily overtime after 8 hours. Weekly overtime applies after 40 hours. The 2024 ballot measure changed daily overtime rules for some workers; check the Nevada Labor Commissioner's site for the current scope.
Colorado
Daily overtime applies after 12 hours at 1.5x. Weekly overtime applies after 40 hours.
Oregon
Weekly overtime after 40 hours. Manufacturing establishments also owe daily overtime after 10 hours.
New York
Weekly overtime after 40 hours. Hospitality workers get "spread of hours" pay, an extra hour at minimum wage when the workday exceeds 10 hours.
Common advice that is wrong
"Salaried means no overtime." Only exempt salaried employees lose overtime rights. Non-exempt salaried employees must be paid overtime.
"Overtime is always after 40 hours." California, Alaska, Nevada, Colorado, and Oregon all have daily thresholds that trigger overtime before the 40-hour mark.
"Overtime is taxed more." It is taxed as ordinary income at the same marginal rate. A single paycheck may have higher withholding because IRS tables project that cheque across a full year, but the actual tax liability depends on total annual income.
"Comp time instead of cash is fine." Private-sector employers must pay cash. Public-sector employees can receive compensatory time off at 1.5x under specific conditions.
"Holiday pay counts toward the 40." Only hours actually worked count. Holiday pay, vacation pay, and sick pay do not.
"Part-timers don't get overtime." Any non-exempt worker who crosses the applicable daily or weekly threshold is owed overtime, regardless of part-time status.
"Double time is federal law." No federal double-time requirement exists. California requires it after 12 hours in a day.
"Independent contractors get overtime." FLSA protections cover employees only. Misclassification as a contractor is one of the most expensive mistakes an organisation can make.