On February 22, 2023, the U.S. Supreme Court issued a decision in Helix Energy Solutions Group, Inc. v. Hewitt, holding that a manager who supervised a dozen employees and made over $200,000 annually was not overtime exempt as defined by the Fair Labor Standards Act (FLSA) and was due overtime compensation.

The plaintiff filed a lawsuit against his employer, claiming he was non-exempt and entitled to overtime because he was not paid on a salary basis.  Instead, he was paid a “daily rate,” which fluctuated throughout his employment, ranging from $963 to $1,314 daily.  Because his compensation was not set from one pay period to the next and varied based on the number of days he worked, he contended that the salary basis test was not satisfied.

The Supreme Court held that paying a daily rate did not qualify for the FLSA’s salary basis test, meaning that Hewitt was non-exempt and entitled to overtime.  The Court reasoned that a salary basis test is satisfied only when employees are paid by the week or more extended period,  not when an employee is paid by the day.

Today, the FLSA salary exemption minimum is $684 per week or $35,568 per year.  However, the Department of Labor (DOL) is expected to seek an increase to $900-1000 per week, somewhere in the $50,000 per annum range.  In 2016, the DOL wanted to raise the limit to $913 per week, but a court blocked that increase, so the salary was raised from $455 with the intent to review this threshold every three years.  In 2010, the threshold amount was raised to its current level of $684 per week. 

However, several states have taken it upon themselves to increase the threshold for exempt salary employees.  Employees must meet specific tests regarding their job duties to qualify for the exemption and be paid on a weekly or longer salary basis.  Most states align with the FLSA Duties Test, with some exceptions.

Below are the jurisdictions with laws requiring exempt employees to have a salary basis above the FLSA threshold to be considered exempt as of January 1, 2023.


Alaska exempt employees must be paid 2x the state minimum wage for the first 40 hours worked each week, excluding board or lodging from the employer.

  • $45,136 annually ($868.00 per week)


California stipulates that exempt employees must earn a monthly salary equal to 2x the state minimum wage for full-time employment, currently at $15.50/hour.

  • $64,480 annually ($5,373.33 monthly)

Computer Software Employees

Computer Software Employees who meet the duties requirements must be paid a salary of at least $112,065.20 annually or $53.80 per hour to be considered exempt.


Colorado’s salary requirements for exemption status are as follows:

  • $50,000 per year ($961.54 per week)
  • If highly technical computer professionals are paid hourly and meet the duties requirements, they must be paid at least $31.41 per hour.

Colorado’s standard threshold will increase in 2024, with an indexed increase slated for 2025.


In Maine, an exempt employee’s annual compensation is $41,401 annually ($796.17 per week).

New York

The exempt salary threshold for New York City and Nassau, Suffolk, and Westchester Counties is $58,500 annually ($1,125 per week).

For other places in New York State, the threshold is $55,341 annually ($1,064.25 per week).


Washington created a salary threshold implementation schedule that goes through 2028.  

Small Businesses (1-50 employees)

  • $57,293.60 annually ($1,101.80/week); salaried workers must be paid at least 1.75x the state’s minimum wage)

Large Businesses (51 or more employees)

  • $65,478.40 annually ($1,259.20/week); salaried workers must be paid at least 2x the state’s minimum wage

Lastly, if computer professionals in Washington are paid hourly and meet the duties requirements, they must be paid at least $55.09 per hour to be considered exempt (3.5 times the state’s minimum wage).

Why is this important?

Organizations must not only understand the increase in the cost of labor over time but factor in continued increases for overtime exempt employees’ minimum rate.  With new pay transparency laws in place in many jurisdictions, companies need to plan their salary budgets this year and in the future.  These changes in overtime exempt rates must be factored in when posting the pay range in job postings.  It is also essential to make sure employees pass the FLSA and local job duties test to verify these employees even qualify for overtime exempt status.