Trying to understand the minimum salary requirements for exempt employees in 2025? It’s important if you want to stay on the right side of federal labor laws and avoid those nasty penalties.
Plenty of employers get tripped up by these rules about who qualifies for overtime exemptions.
The federal minimum salary threshold for exempt employees sits at $844 per week ($43,888 annually) in 2025, but your location and job category can make that number higher. This threshold covers executive, administrative, and professional exemptions under the Fair Labor Standards Act.
Don’t forget to check both federal and state requirements since some states bump up their thresholds.
Just meeting the salary number isn’t enough.
You also need to make sure your exempt employees actually fit the duties test for their exemption category.
Workplace laws taking effect in 2025 keep changing, so it’s smart to review your classification practices from time to time.
If you get it wrong, you might face back pay claims, penalties, and legal headaches that cost way more than just staying compliant.
Key Takeaways
- The federal minimum salary threshold for exempt employees is $844 per week or $43,888 annually in 2025
- You need to check both salary thresholds and duties tests to classify exempt employees correctly
- Regular compliance reviews help you dodge penalties and legal trouble from misclassification
2025 Minimum Salary Thresholds for Exempt Employees
The federal minimum salary for exempt employees stays at $684 per week in 2025, but several states have their own, higher thresholds. Alaska’s minimum wage increase impacts salary requirements for white-collar exemptions.
Overview of 2025 Exempt Salary Requirements
You have to pay exempt employees a minimum salary if you want them to qualify for overtime exemptions under the Fair Labor Standards Act.
The federal threshold is $684 per week, or $35,568 per year for 2025.
This salary test applies to executive, administrative, and professional exemptions.
Exempt employees must get their full salary, no matter how many hours they work or how well they perform.
Key salary requirements:
- Minimum $684 per week federal threshold
- Payment on a salary basis with no deductions
- Meeting duties test requirements
- Following higher state minimums if they exist
Some states set higher salary thresholds that override federal requirements.
You need to use whichever standard is better for employees in your area.
The salary must be set in advance and can’t go down just because of work quality or quantity.
Deductions for full-day absences are allowed in certain cases.
Federal and State-Specific Minimum Salary Changes
Alaska bumped its minimum salary to $1,040 per week for white-collar exemptions starting July 1, 2025.
That change came with the state’s minimum wage increase to $13 per hour.
California keeps some of the highest salary thresholds in the country.
Exempt employees there must get at least twice the state minimum wage based on a 40-hour week.
State-specific requirements really aren’t uniform:
- Alaska: $1,040 per week ($54,080 annually)
- California: Depends on employer size and location
- New York: Different rates for NYC, suburbs, and upstate
- Washington: Higher thresholds in certain cities
Many states link their exempt salary minimums to minimum wage rates.
When the minimum wage goes up, so does the exempt salary threshold.
You have to keep an eye on both federal and state requirements wherever you employ exempt workers.
The higher standard always wins.
Impact on Overtime Eligibility
If employees don’t meet salary thresholds, they automatically qualify for overtime pay no matter what their job duties are.
You need to pay them time-and-a-half for hours over 40 in a workweek.
Virginia’s expanded non-compete ban now covers all employees who get overtime under federal law, including those below exempt salary thresholds.
When salary thresholds go up, some employees who were exempt before might suddenly be eligible for overtime.
You’ll need to reclassify them and maybe adjust their compensation structure.
Reclassification steps:
- Switch to hourly pay or raise salary above threshold
- Set up time tracking systems
- Adjust workload expectations
- Tell affected employees about the changes
Some employers just raise salaries above the new thresholds to keep employees exempt.
Others switch people to hourly pay and manage overtime with scheduling.
You’ll want to look at each position separately, considering job duties, current pay, and what your business really needs.
Key Considerations and Compliance Strategies
Classifying exempt employees the right way takes a careful look at job duties and salary minimums.
Remote work adds some wrinkles, and you’ll need to plan ahead to avoid big mistakes.
Classification Guidance for Exempt Roles
Primary duties matter more than job titles.
You need to look at what employees actually do, not just what their job description says.
The Fair Labor Standards Act (FLSA) spells out federal guidelines for exempt classifications.
There are three main categories:
- Executive: Manages two or more employees as their main job
- Administrative: Handles office work tied to business operations
- Professional: Needs advanced knowledge in specialized fields
Salary basis test means you pay a fixed weekly amount no matter how many hours they work.
You can’t dock pay for partial day absences for personal reasons.
People often misclassify roles based on seniority.
A senior clerk who just does routine tasks is still non-exempt, no matter how long they’ve worked.
Keep solid records of what exempt employees actually do every day.
Remote Work and Its Impact on Exempt Salary Compliance
Remote work doesn’t change exempt salary requirements.
Your obligations stay the same whether someone works at home or in the office.
Multi-state issues can get tricky.
If remote employees work in different states, you have to meet the highest minimum salary threshold that applies.
Keep track of where your remote employees work.
Some states make you follow local wage laws, even if your company is based somewhere else.
Technology monitoring brings up new questions about exempt status.
If you closely monitor hours and work habits, you might be treating someone as non-exempt.
Setting clear expectations matters.
If you require employees to answer emails or messages outside normal hours, you might blur the lines for exempt status.
Write up remote work policies that set clear rules for availability, work hours, and communication—without micromanaging.
Implementation Timelines and Employer Preparation
Audit your current classifications before new thresholds kick in.
Review every position claiming exempt status about 90 days before changes happen.
Here’s a basic checklist:
- Check job descriptions and actual duties
- Calculate current salary levels
- Identify which positions are affected
- Figure out the budget impact
- Plan how you’ll communicate changes
Payroll systems need time to update.
Work with HR and finance to make sure your systems can handle new salary minimums.
Think about reclassification options.
Some employees might switch to non-exempt instead of getting a salary bump.
Keep records showing the steps you took to stay compliant.
Train managers about the new rules.
Supervisors need to know how these changes affect their teams and daily work.
Budget for the costs.
This could mean higher salaries, system updates, or more overtime pay for reclassified employees.
Frequently Asked Questions
State-specific minimum salary requirements for exempt employees really vary across the U.S. in 2025.
Federal guidelines set a baseline, but states can set higher minimum salary levels for exempt status.
What is the minimum salary requirement for exempt employees in California in 2025?
California keeps higher minimum salary thresholds than the federal rules for exempt employees.
The state requires most exempt employees to earn at least $66,560 a year.
This applies to executive, administrative, and professional exemptions.
California figures this threshold as twice the state minimum wage for full-time work.
Computer software employees have different rules.
They need to earn at least $112,065.20 annually or $53.80 per hour if paid hourly.
How does the 2025 minimum salary threshold for exempt employees vary by state?
Minimum wage rates by state create different exempt salary thresholds across the country.
States with higher minimum wages usually require higher exempt salaries.
Some states stick with the federal minimums.
Others set their own higher standards based on state minimum wage calculations.
Pennsylvania requires $780 per week for exempt status.
Washington state has higher thresholds in cities like Seattle compared to rural areas.
What are the updated federal minimum salary guidelines for exempt employees in 2025?
The federal minimum salary for exempt employees stays at $684 per week, or $35,568 a year.
This covers executive, administrative, and professional exemptions under the Fair Labor Standards Act.
The Department of Labor hasn’t announced changes to this federal minimum for 2025.
There might be proposed increases later in the year, but nothing official yet.
Highly compensated employees need to make at least $107,432 a year to qualify for exemption.
That includes at least $684 per week in guaranteed salary.
Are there different minimum salary levels for exempt employees in New York and Texas in 2025?
New York sets much higher minimum salary requirements than Texas.
In New York City, exempt employees need to make $1,161.65 per week.
Upstate New York has a lower threshold at $1,064.25 per week.
These numbers reflect the state’s higher minimum wage rates.
Texas only uses the federal minimum salary requirements.
Exempt employees in Texas need to earn $684 per week to qualify.
What changes have been made to the minimum salary for exempt employees in Florida as of 2025?
Florida still follows federal minimum salary requirements for exempt employees.
The state hasn’t set higher thresholds for exempt status.
Florida’s minimum wage went up in 2025, but that doesn’t change exempt salary calculations.
The state sticks with the federal guideline of $684 per week for exempt employees.
No new laws have changed Florida’s approach to exempt employee salary requirements.
Employers just need to meet federal standards for all exemptions.
What is the threshold for exempt employee salaries in 2025 for states like Ohio and Michigan?
Ohio sticks with the federal minimum salary for exempt employees.
Right now, that’s $684 per week, or $35,568 a year, if you want exempt status.
Michigan goes with the same federal guidelines.
There aren’t any extra state rules on top of that.
Both states just use the Department of Labor’s standards for exempt workers.
Even though Ohio and Michigan have their own minimum wages, they haven’t set higher salary thresholds for exemptions.
So, if you’re in Ohio or Michigan, the federal exemption rules cover you.