Salary vs Hourly in Texas: The $684 Test Owners Still Get Wrong

A lot of Texas owners think “salary” means “no overtime.” I hear it every month. Someone got a raise, a better title, and a promise that the extra hours are “part of the job.” Then a wage claim shows up, or a good person walks, and we have to unwind a story that was never true.

Texas does not have its own higher salary test. We follow the federal Fair Labor Standards Act. After the 2024 overtime rule was thrown out in Texas federal court, the U.S. Department of Labor put the older numbers back in the books in May 2026. The number that matters for most “white collar” exemptions is still $684 a week. That is $35,568 a year if they work the full year. There is also a duties test. You need both.

Three things have to be true, not one

For the usual executive, administrative, or professional exemption, all three have to hold:

• Salary basis: a set amount each pay period that does not shrink because they had a slow week or a bad day.
• Salary level: at least $684 a week, not counting board or lodging. Highly compensated employees have a separate, higher yearly number ($107,432) and still need at least $684 a week paid as salary.
• Duties: the real job, most of the time, is running the work, exercising real discretion, or practicing a recognized profession. The title on the offer letter does not count.

Miss any one of those and they are hourly for overtime purposes, even if you pay them a salary. You can still pay a salary to a non-exempt person. You just also owe overtime when the hours go over 40 in the workweek.

What the 2024 rule did, and what Texas courts did to it

The 2024 rule would have lifted that floor in steps, toward $1,128 a week. Two Texas federal courts vacated the whole rule. In May 2026 the Fifth Circuit let those decisions stand, and the DOL issued a technical amendment putting the 2019 numbers back in the Code of Federal Regulations. So as of this writing, the live federal floor is $684 a week. It is not scheduled to auto-increase.

If you already raised people toward the higher number because you thought it was coming, do not yank the money back to “save” the exemption. That is a morale problem dressed up as compliance. Keep the pay if you can. Check the duties. Fix the classification going forward.

The jobs that usually fail the test

• Lead, supervisor, or “manager” who still does the same production work as the crew and does not hire, fire, or really direct two or more people.
• Office coordinator or admin who follows a script, not someone who runs the office.
• A salaried person under $684 a week. No duties speech fixes that.
• Someone you dock when they miss a few hours. That starts to look like hourly pay with extra steps.

Outside sales and a few other exemptions use a different test. Do not copy-paste “manager” onto those either. If you are not sure, that is a conversation, not a guess in payroll.

A Tuesday-morning check you can actually run

• Print the list of everyone you treat as salary or exempt.
• Next to each name, write the weekly salary and whether it clears $684.
• In one sentence, write what they actually do most days. Not the title. The work.
• Anyone under the number, or whose sentence is “same work as the crew,” comes off the exempt list until you fix pay or the job.
• If they are non-exempt, start keeping hours. A notebook is better than nothing. A real timesheet is better than a notebook.

If this list is longer than you wanted, you are not the first. Misclassification is expensive because overtime can look backward. Get current. Then talk with counsel about anything you already owe. I will help you stand the process up. I will not pretend a blog post closes a wage claim.

How this shows up in real companies

A site supervisor making $800 a week who truly runs the crew, assigns work, and has a say in hiring is often in a different place than a lead who is the fastest pair of hands on the floor. Both can be good people. Only one of those jobs is usually an exempt job. Pay the lead overtime when the week runs long. That is not a loss of respect. It is the law matching the work.

Payday still has to be on time. Final pay still follows Texas Payday Law. Classification is a different question sitting on the same desk. If hours are a mess, overtime math will be a mess. That is why I built CypressHR with time and hours in one place, and why fractional HR is often the person who walks this list with you once, then leaves you a way to keep it.

If you want a second set of eyes on your list, say so. Fifteen minutes. No pitch. Bring the titles and the weekly pay. We will see whether the jobs match the labels.

This is general information for Texas owners, not legal advice and not a determination about your company. Rules change. For a situation with names and dates, talk with an employment attorney. If you want a practical partner to stand the process up, that is the work we do.