Salary Is One of Three Federal Tests, Not the Test — and the Federal Salary Level Is Back at $684 a Week Because Two Courts Vacated the 2024 Rule

Three tests, and pay method is only one of them

The federal exemption from minimum wage and overtime for executive, administrative, and professional employees comes from one sentence of statute. 29 U.S.C. § 213(a)(1) exempts

any employee employed in a bona fide executive, administrative, or professional capacity (including any employee employed in the capacity of academic administrative personnel or teacher in elementary or secondary schools), or in the capacity of outside salesman (as such terms are defined and delimited from time to time by regulations of the Secretary, subject to the provisions of subchapter II of chapter 5 of title 5 …).

The statute supplies no salary figure, no duties list, and no job titles. It delegates all of it, and what the Secretary has done with the delegation is 29 C.F.R. part 541. The Department of Labor describes the structure in its own words in the Federal Register, at 91 FR 27833, 27834 (May 15, 2026):

Pursuant to its explicit rulemaking authority, the Department has long maintained regulations that generally require each of the following three tests to be met for an employee to be exempt: (1) the employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the regulations (the duties test); (2) the employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (the salary basis test); and (3) the amount of salary paid must meet a minimum specified amount (the salary level test).

A footnote to that passage records an important limit: “The salary basis and salary level tests do not apply to doctors, lawyers, teachers, and outside sales employees. See 29 CFR 541.303(d), 541.304(d), 541.500(c).”

The salary level is $684 a week, and the reason it is not $1,128

29 C.F.R. § 541.600(a), as the electronic Code of Federal Regulations carried it on September 9, 2026 — the most recent issue date for title 29 as of this writing — reads:

To qualify as an exempt executive, administrative or professional employee under section 13(a)(1) of the Act, an employee must be compensated on a salary basis at a rate of not less than $684 per week (or $455 per week if employed in the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, or the U.S. Virgin Islands by employers other than the Federal Government, or $380 per week if employed in American Samoa by employers other than the Federal Government), exclusive of board, lodging or other facilities. Administrative and professional employees may also be paid on a fee basis, as defined in § 541.605.

Paragraph (b) converts it: “the $684-per-week requirement will be met if the employee is compensated biweekly on a salary basis of not less than $1,368, semimonthly on a salary basis of not less than $1,482, or monthly on a salary basis of not less than $2,964. However, the shortest period of payment that will meet this compensation requirement is one week.”

A great deal of what is currently published about this number is wrong, and the history explains why. The source note the eCFR prints under § 541.600 is “[91 FR 27835, May 15, 2026]” — a 2026 document, not a 2019 one. The Department’s own account of what happened, from that document:

• The 2019 rule, 84 FR 51230 (Sept. 27, 2019), raised the salary level “from $455 per week to $684 per week (equivalent to $35,568 per year for a full-year worker)” and the highly-compensated threshold “from $100,000 per year to $107,432 per year.” It took effect January 1, 2020, and, as the Department notes, “the salary level itself was not challenged.”
• The 2024 rule, 89 FR 32842 (Apr. 26, 2024), “featured two increases to the standard salary level and the HCE total annual compensation threshold, with the salary level slated to increase to $844 per week on July 1, 2024, further rise to $1,128 per week on January 1, 2025, and the HCE total annual compensated level to increase to $132,964 and $151,164 on these respective dates,” plus “automatic triennial updates to the earnings thresholds.”
• Four lawsuits followed. The Department reports that on November 15, 2024, the U.S. District Court for the Eastern District of Texas vacated the 2024 rule in Texas v. U.S. Dep’t of Labor, 756 F. Supp. 3d 361 (E.D. Tex. 2024), and that on December 30, 2024, the U.S. District Court for the Northern District of Texas did the same in Flint Avenue, LLC v. U.S. Dep’t of Labor, No. 5:24-cv-00130-C. “These orders remain final judgments following the dismissal of the appeal in each case by the U.S. Court of Appeals for the Fifth Circuit on May 5 and 7, 2026, respectively.”
• The Department then stated the consequence: “In light of these judgments, the operative version of the Department’s part 541 regulations is the version of these regulations that was in place on June 30, 2024, prior to the effective date of the 2024 rule, and which the Department has been enforcing.”

The May 15, 2026 document is a “[f]inal rule; technical amendment” that, in its own summary, removes “from the Code of Federal Regulations (CFR) the regulatory text from the now-vacated 2024 rule and republish[es] in its place the regulatory text as it existed prior to the effective date of that rule.” It took effect on publication, and the Department explained why it did not wait: delay “could, for example, mislead employees and employers who consult the CFR to learn about their rights and responsibilities under the FLSA.”

One qualification this page will not blur. The two district court decisions are reported here as the Department described them in the Federal Register. Neither opinion was retrieved or read for this page, and nothing is said here about what either court reasoned.

Salary basis: what the employer is actually promising

The salary level is a number. The salary basis is a promise, and 29 C.F.R. § 541.602(a) states it:

An employee will be considered to be paid on a “salary basis” within the meaning of this part if the employee regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of the employee’s compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed.

Two sentences that follow do most of the work in practice. Paragraph (a)(1): “an exempt employee must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked. Exempt employees need not be paid for any workweek in which they perform no work.” And paragraph (a)(2), which is the one employers most often trip over: “An employee is not paid on a salary basis if deductions from the employee’s predetermined compensation are made for absences occasioned by the employer or by the operating requirements of the business. If the employee is ready, willing and able to work, deductions may not be made for time when work is not available.”

Up to ten percent of the required salary may be met with “nondiscretionary bonuses, incentives and commissions, that are paid annually or more frequently,” § 541.602(a)(3), with a catch-up payment mechanism in (a)(3)(i) and a pro rata rule for partial years in (a)(3)(ii). That allowance “does not apply to highly compensated employees under § 541.601.”

Paragraph (b) lists seven exceptions to the no-deduction rule, and they are narrower than they sound:

1. Absences “for one or more full days for personal reasons, other than sickness or disability.” The regulation’s own example: “if an exempt employee is absent for one and a half days for personal reasons, the employer can deduct only for the one full-day absence.”
2. Absences “of one or more full days occasioned by sickness or disability (including work-related accidents) if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for loss of salary occasioned by such sickness or disability.”
3. Jury duty, witness attendance, and temporary military leave — where an employer “cannot make deductions from pay,” but “can offset any amounts received by an employee as jury fees, witness fees or military pay for a particular week against the salary due for that particular week.”
4. “[P]enalties imposed in good faith for infractions of safety rules of major significance,” which the regulation defines as those “relating to the prevention of serious danger in the workplace or to other employees.”
5. “[U]npaid disciplinary suspensions of one or more full days imposed in good faith for infractions of workplace conduct rules,” which “must be imposed pursuant to a written policy applicable to all employees.”
6. The initial and terminal weeks of employment, where “an employer may pay a proportionate part of an employee’s full salary for the time actually worked.”
7. Weeks in which an exempt employee takes unpaid leave under the Family and Medical Leave Act.

Paragraph (c) governs the arithmetic: the employer “may use the hourly or daily equivalent of the employee’s full weekly salary or any other amount proportional to the time actually missed,” except that a penalty for violating a major safety rule under (b)(4) “may be made in any amount.”

Section 541.604 preserves the exemption where extra pay sits on top of the required weekly minimum. Paragraph (a):

An employer may provide an exempt employee with additional compensation without losing the exemption or violating the salary basis requirement, if the employment arrangement also includes a guarantee of at least the minimum weekly-required amount paid on a salary basis.

Paragraph (b) extends that to pay computed by the hour, the day, or the shift, on one condition:

An exempt employee’s earnings may be computed on an hourly, a daily or a shift basis, without losing the exemption or violating the salary basis requirement, if the employment arrangement also includes a guarantee of at least the minimum weekly required amount paid on a salary basis regardless of the number of hours, days or shifts worked, and a reasonable relationship exists between the guaranteed amount and the amount actually earned.

Improper deductions can cost the exemption — for a group of employees, not just one

The regulation is not one-sided. Paragraph (c) provides that “[i]mproper deductions that are either isolated or inadvertent will not result in loss of the exemption for any employees subject to such improper deductions, if the employer reimburses the employees for such improper deductions.” Paragraph (d) is a full safe harbor for an employer with “a clearly communicated policy that prohibits the improper pay deductions specified in § 541.602(a)” that “includes a complaint mechanism, reimburses employees for any improper deductions and makes a good faith commitment to comply in the future” — unless the employer “willfully violates the policy by continuing to make improper deductions after receiving employee complaints.” And paragraph (e) tells a reader how to read the whole section: “This section shall not be construed in an unduly technical manner so as to defeat the exemption.”

The duties tests

Each of the three exemptions is a short list, and the salary requirement is the first item on each list.

Executive, 29 C.F.R. § 541.100(a):

(1) Compensated on a salary basis pursuant to § 541.600 at a rate of not less than $684 per week …;

(2) Whose primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof;

(3) Who customarily and regularly directs the work of two or more other employees; and

(4) Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight.

Administrative, § 541.200(a), requires the salary or fee basis, plus a primary duty of “the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers,” and a primary duty that “includes the exercise of discretion and independent judgment with respect to matters of significance.”

Professional, § 541.300(a), requires the salary or fee basis, plus a primary duty of work “[r]equiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction” or work “[r]equiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.”

“Primary duty” is itself defined. Section 541.700(a): “The term ‘primary duty’ means the principal, main, major or most important duty that the employee performs. Determination of an employee’s primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee’s job as a whole.” Paragraph (b) handles the arithmetic people expect to control: “employees who spend more than 50 percent of their time performing exempt work will generally satisfy the primary duty requirement. Time alone, however, is not the sole test, and nothing in this section requires that exempt employees spend more than 50 percent of their time performing exempt work.”

The highly compensated shortcut is § 541.601. Since January 1, 2020, “an employee with total annual compensation of at least $107,432 is deemed exempt under section 13(a)(1) of the Act if the employee customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee as identified in subparts B, C or D of this part.” Total annual compensation “must include at least $684 per week paid on a salary or fee basis,” § 541.601(b)(1), and the section has a hard boundary in paragraph (d): it “applies only to employees whose primary duty includes performing office or non-manual work,” so “non-management production-line workers and non-management employees in maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, construction workers, laborers and other employees who perform work involving repetitive operations with their hands, physical skill and energy are not exempt under this section no matter how highly paid they might be.”

Minnesota runs a different exemption, on different numbers

Minnesota’s exclusion is a clause in a definitions section, not a regulation-driven scheme. Minn. Stat. § 177.23, subd. 7(6), removes from the word “employee”

any individual employed in a bona fide executive, administrative, or professional capacity, or a salesperson who conducts no more than 20 percent of sales on the premises of the employer;

The clause contains no dollar figure. The Department of Labor and Industry’s rules do, and they are old and structurally unlike the federal ones: each of the three categories has two alternative tests, a higher-salary test with fewer duties and a lower-salary test with more.

The teacher item in the professional table reads, in full, Minn. R. 5200.0210, subp. 2, item B, subitem (3):

is a certified teacher working as such or recognized as such in the school system where the person works;

Minn. R. 5200.0180 supplies the rules that govern all six tests. Subpart 1: “The primary duties of the employee are determinative of his or her status under this exemption. Only where the employee’s primary duties meet all the criteria under a particular test may the employer consider the employee to be exempt from the overtime wage provisions.” Subpart 2 defines “manage” as “to control and direct the business operations of a given enterprise, department, or branch establishment,” and requires that “[d]uties involved in managing must involve the making of decisions and the issuance of directions to other employees which involve skill and judgment.” Subpart 3 draws the discretion line “between those employees empowered to independently commit their employers on matters of importance and those employees who merely make day-to-day decisions which, although necessary to the daily operations of the employer’s business, are routine, or follow prescribed procedures, or involve a determination of whether specific standards are met, or are lacking in substantial importance to the employer’s business as a whole,” and adds that “[m]ere recommendations with respect to policies and procedures are not sufficient unless it can be shown that the employer consistently accepted and followed those recommendations.” Subpart 4 limits “sole charge” to “[o]nly one employee per enterprise, department, or branch establishment … regardless of the number of work shifts per day.”

Minn. R. 5200.0211 is Minnesota’s salary-basis rule, and it is four sentences where the federal one is four pages:

A salary is not an hourly rate. An employee is paid a salary if the employee, through agreement with an employer, is guaranteed a predetermined wage for each workweek. An employee may still be salaried even if complete days absent are deducted from salary for reasons other than no work available. Should those deductions reduce the salary for the workweek below the minimum salary required by Minnesota Statutes, section 177.23, subdivision 7, clause (2), or parts 5200.0190 to 5200.0210, the employer will lose the exemption in that workweek.

Subpart 2 adds: “Complete weeks in which an employee performs no work may be deducted from salary.”

One drafting note a reader should have, stated as what the documents say rather than as a conclusion about their effect. Minn. R. 5200.0211, subp. 1, cross-references “Minnesota Statutes, section 177.23, subdivision 7, clause (2)” as a source of a minimum salary. Clause (2) of § 177.23, subd. 7, as the Revisor posts it, excludes from “employee” any “individual employed in agriculture on a farming unit or operation who is paid a salary greater than the individual would be paid if the individual worked 48 hours at the state minimum wage plus 17 hours at 1-1/2 times the state minimum wage per week” — an agricultural provision, not a general executive-administrative-professional salary floor. The rule’s History line is “11 SR 1740” and the Revisor published it electronically on June 11, 2008. No source retrieved for this page fixes when the clause numbering in § 177.23, subd. 7, last changed — the numbering was already what it is today when the legislature reenacted the subdivision in Laws 2005, ch. 10, art. 1, § 33. This page reports the mismatch between the two texts as retrieved. It does not say what a court or the Department would make of it.

Which system governs

Both, at once, where both cover the work. 29 C.F.R. § 541.4 states the federal side:

The Fair Labor Standards Act provides minimum standards that may be exceeded, but cannot be waived or reduced. Employers must comply, for example, with any Federal, State or municipal laws, regulations or ordinances establishing a higher minimum wage or lower maximum workweek than those established under the Act.

The same section adds that while “collective bargaining agreements cannot waive or reduce the Act’s protections, nothing in the Act or the regulations in this part relieves employers from their contractual obligations under collective bargaining agreements.”

The practical consequence for overtime is worked through on breaks and overtime after January 1, 2026, which sets out Minnesota’s 48-hour threshold against the federal 40 and the nineteen exclusions in § 177.23, subd. 7. The broader comparison of the two sovereigns’ rules is on Minnesota versus the federal floor. If the question is whether there is an employment relationship at all, that comes first and is on misclassified as a contractor.

Currency

The federal regulations were retrieved from the eCFR versioner API on September 11, 2026, at the most recent issue date then available for title 29, September 9, 2026. The eCFR was used rather than a mirror because a mirror can serve superseded or removed text with no status note. Each section’s own source note was read: §§ 541.100, 541.200, 541.300, 541.601, 541.602, and 541.604 each end “91 FR 27835, May 15, 2026” or “91 FR 27836, May 15, 2026”; § 541.600 carries “[91 FR 27835, May 15, 2026]” alone; and §§ 541.2, 541.4, 541.603, and 541.700 carry no source note at all.

The status of the 2024 rule was taken from the Federal Register document itself — 91 FR 27833, document number 2026-09839, “Final rule; technical amendment,” published and effective May 15, 2026 — and not from any secondary account.

On the Minnesota side, the Revisor publishes the 2025 edition of the statutes. Section 177.23’s History line ends “2024 c 110 art 6 s 1,2,” and a Table 2 query run per exact section on September 11, 2026 returns four rows, the most recent being the two new definitions added by Laws 2024, ch. 110, art. 6, §§ 1 and 2 — neither of which touches subd. 7. The rules were read at revisor.mn.gov/rules. Minn. R. 5200.0190 and 5200.0210 carry the History line “17 SR 1279”; 5200.0211 carries “11 SR 1740”; 5200.0180 and 5200.0200 carry no History line. All five were published electronically on June 11, 2008. The dollar figures in those rules are the figures the Revisor posts today.

No case is cited on this page.

What this page does not do

This page sets out two exemption schemes. It does not classify a job. Whether a given employee’s primary duty is management, whether a particular deduction was improper, whether an employer’s practice is an “actual practice” under § 541.603(a), and which of Minnesota’s six alternative tests a job might fall under are all questions about facts and documents, and applying these rules to them is not what this page does. What is general: a title is not an exemption, a salary is not an exemption, and the federal number is $684 a week because two judgments put it back there — not because a rulemaking raised it and stuck.