• Employers may want to prepare for 2026 by mapping exempt roles in Alaska, California, Maine, New York, and Washington to new salary thresholds and implementing adjustments aligned with effective dates.
• To avoid salary compression, employers may want to reconcile pay bands in the thirty-one states with higher minimum wages than federal law and ensure that any threshold multipliers are captured in exempt pay.
• Employers may also want to refresh exemption determinations in jurisdictions with state-specific duties tests, documenting how each role satisfies these tests and confirming whether any federal exemptions are not recognized locally.

1. Salary Thresholds for Exemptions: Key 2026 Changes

White-collar exemptions generally require both a salary basis and duties test. Where a state sets a higher salary threshold than the FLSA ($684 per week under current federal rules), employers must meet the more protective state level. Several jurisdictions have increased or defined thresholds taking effect in 2026.

To ensure compliance, employers will want to confirm that affected exempt roles in these jurisdictions meet both the salary basis and the applicable duties test. When thresholds increase mid-year (e.g., Alaska, July 1), consider building a staged implementation plan to avoid underpayment exposure. Where multistate jobs are involved, consider paying up to the highest threshold that could apply to the employee’s work location(s) to simplify administration and reduce...

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