Here is the rule:
The practice squad shall consist of the following players, provided that they have not served more than two previous seasons on a Practice Squad: (i) players who do not have an Accrued Season of NFL experience; and (ii) free agent players who were on the Active List for fewer than nine regular season games during their only Accrued Season(s). An otherwise eligible player may be a practice squad player for a third season only if the Club by which he is employed that season has at least 53 players on its Active/Inactive List during the entire period of his employment. A player shall be deemed to have served on a Practice Squad in a season if he has passed the club’s physical and been a member of the club’s Practice Squad for at least three regular season or postseason games during his first two Practice Squad seasons, and for at least one regular season or postseason game during his third Practice Squad season. (A bye week counts as a game provided that the player is not terminated until after the regular season or postseason weekend in question.) and who did not dress for more than eight (8) regular season games during their only accrued (i.e., on the 53 man roster for at least 6 games) season. Minimum salary for a practice squad player shall be $4,700 per week for the 2006-07 League Years, $5,200 per week for the 2008-10 League Years and the 2011 League Year if it is an Uncapped Year, and $5,700 per week for the 2011 League Year if it is a Capped Year and the 2012 League Year, including postseason weeks in which his Club is in the playoffs. Aigher salary can be negotiated. In addition, a player under contract to a club as a Practice Squad player is completely free to sign a contract with another NFL club during the season in order to be on the second club's Active/Inactive (i.e., 53 man) list. A practice squad player may not sign an NFL Player Contract with his Club’s next opponent later than 4:00 p.m., New York time, on the sixth day preceding the game (except in bye weeks, when the prohibition commences on the tenth day preceding the game).If another club signs a Practice Squad player to its 53 man roster it does not have to provide any sort of compensation to the player's former club but it generally must keep the player on the 53 man roster for at least 3 weeks, thereby mandating that he earns the minimum first year salary for said 3 week period ( prorated weekly). Also note that a team can add and release players from the practice squad as often as it desires and the eight (8) man limit does not have to be maintained. A player may be on the practice squad for two seasons; three weeks on the practice squad count as a season. An otherwise eligible player may be a practice squad player for a third season only if the Club by which he is employed that season has at least 53 players on its Active/Inactive List during the entire period of his employment. The League may elect to allow some or all Clubs to add to their practice squads one additional player, who shall not count against the limit above, whose citizenship and principal place of residence are outside the United States and its Territories (“International Player”). The League’s election in any one season shall not determine or affect its election in any subsequent season
