2026 Salary Threshold Increases

Nextep blog - overtime exemption state threshholds

Federal and state laws govern pay and overtime exemptions. The federal Fair Labor Standards Act (FLSA) requires overtime pay for non-exempt employees who work more than 40 hours per week. Some states, however, have added their own rules. Employees must meet specific salary and duties tests to qualify for overtime exemption at both the federal and state levels. Key federal and state overtime exemption points for 2026 follow.

Federal Overtime Exemptions

The Fair Labor Standards Act (FLSA) provides specific exemptions from federal overtime (and minimum wage) requirements for employees who hold executive, administrative, or professional positions (often called “exempt” employees).

To qualify for these “EAP” (executive, administrative, and professional) exemptions, an employee must generally satisfy all three distinct tests. Failing even one of these tests means the employee is non-exempt:

Salary-Basis Test: You must pay the employee a predetermined, fixed salary amount. Pay does not reduce due to variations in the quality or quantity of work performed.
Salary-Level Test: The employee must receive at least the specified minimum weekly salary.
Duties Test: The employee’s primary duties must meet the criteria for executive, administrative, or professional roles as defined by the U.S. Department of Labor.

Federal Minimum Salary Remains $684 per week.

The federal minimum salary required for EAP overtime exemptions remains at $684 per week for 2026, consistent with the 2025 rate.

Updates to State Salary Requirements for Overtime Exemption

State laws often include distinct salary and duties tests for state overtime exemption. If state law offers greater employee protection than federal law, the state law generally applies. Consult legal counsel for employee classification.

Effective January 1, 2026, the minimum salary requirements for overtime exemptions will increase in five states, surpassing the current federal level of $684 per week.

See a summary of these changes below, or follow these shortcuts:

  +  California
  +  Colorado
  +  Maine
  +  New York
  +  Washington

CALIFORNIA

To qualify for California’s EAP overtime exemptions, employees must satisfy the salary and duties tests. They must also earn at least twice the state minimum hourly wage based on a 40-hour workweek.

The minimum weekly salary for these state exemptions will rise to $1,352 per week on January 1, 2026.

Computer Software Employees:

In accordance with Labor Code Section 515.5(a)(4), the Fair Labor Standards Act (FLSA) has updated the minimum hourly rate exemption for computer software employees. The new rates, effective January 1, 2026, are as follows:

– Hourly rate minimum: increased from $56.97 to $58.85

– Monthly salary minimum: increased from $9,888.13 to $10,214.44

– Annual salary minimum: increased from $118,657.43 to $122,573.13

COLORADO

In Colorado, effective January 1, 2026, the minimum salary for EAP overtime exemptions increases to $1,111.23 per week. This change complies with the Colorado Overtime & Minimum Pay Standards (COMPS) Order.

Highly technical computer employees are exempt if paid a salary of at least $1,111.23 per week or an hourly rate of at least $34.85.

MAINE

Due to a state minimum wage increase, the base weekly salary for these exemptions will rise to $871.16 on January 1, 2026.

NEW YORK

To qualify for New York’s executive and administrative overtime exemptions, employees must meet minimum salary and duties tests.

The minimum weekly salary for these exemptions will rise on January 1, 2026, to:

$1,275.00 in New York City and Nassau, Suffolk, and Westchester counties.
$1,199.10 elsewhere in the state.

State law has a professional exemption with duties tests, but no minimum salary; however, federal law requires a minimum wage of $684 per week for this exemption. Employers must meet both federal and state criteria to classify employees as overtime-exempt.