Good morning. If you pay a foreman or an office manager a flat salary and no overtime, a federal rule just settled the number that decides whether that's legal — and the number was never your real risk. Here's what changed, and the trap that didn't.

Top story: the overtime salary line is officially back to $35,568

The Labor Department has made it official. The salary floor for the "white-collar" overtime exemption is $684 a week — $35,568 a year — the level that stood before 2024 (Department of Labor final rule, 91 FR 27833). The 2024 rule that would have pushed it to about $58,656 is dead: courts in Texas vacated it, the department dropped its appeal, and this rule formally strikes it from the books.

Here's what it means for you. A salaried executive, administrative or professional employee has to be paid at least $684 a week before you can treat them as exempt from overtime. Pay a salaried worker less than that, and they're owed time-and-a-half for hours over 40 — no matter the title. Pay above it, and you've cleared only one of three tests. (This is about who you must pay overtime to — not the new "no tax on overtime" deduction on your techs' pay, which is a separate tax break we covered in a prior issue.)

Quick hits

  • Your Monday didn't change. The department stopped enforcing the 2024 rule after the courts vacated it in late 2024 and has applied the $684 level ever since; this rule just makes it formal and certain (Department of Labor). If your payroll already runs on $684, you're already compliant.

  • The high-earner shortcut is back too. The "highly compensated employee" threshold returns to $107,432 a year, down from the $132,964 the 2024 rule had set (DOL, 91 FR 27833). It's a simpler path to exempt for a well-paid office or management role — but the employee still has to perform at least one exempt duty. The dollars alone don't do it.

  • This is the federal floor, not the ceiling. Several states set their own, higher salary thresholds for exemption, and where a state's number is higher, it wins. If you run crews in more than one state, check each one before you lean on $35,568.

The Tip: the salary test isn't the one that bites — audit the duties

The number is the easy test. The one that costs trades shops money is the duties test, and a lower salary floor makes it more tempting to get wrong. Paying someone a salary above $684 a week does not make them exempt. For the executive exemption, their primary duty has to be managing — regularly directing at least two employees, with real authority over hiring and firing (29 CFR 541.100). A "working foreman" who spends most of his day turning wrenches, running his own calls on your schedule, is doing the work of a non-exempt employee no matter what the business card says. If you've carried him on salary with no overtime, you can owe back pay — plus an equal amount again in liquidated damages.

This week: list everyone you pay a flat salary with no overtime. For each, ask one question — what does he actually do all day? If the honest answer is "the same work as my hourly techs, plus a little supervising," that's a classification to fix now, not after a wage claim.

Tool watch: [Not sponsored]

Before you decide anyone is exempt, read the test an investigator actually applies. The DOL's Fact Sheet #17A, free on dol.gov, lays out all three parts — salary basis, the $684 salary level, and the duties test — in plain language, with the executive, administrative and professional duties spelled out. It's a short read, and it's the same standard a wage-and-hour audit runs on. No one paid for this mention.

That's the callout. See you next time.

The Callout — the business brief for the trades. We label every commercial placement: [Sponsor], [Affiliate], or [Not sponsored]. Today's Tool watch is our own honest read: no one paid for it, and the only thing named is a free federal fact sheet. 231J Ramparts Road, Te Anau 9600, New Zealand · Unsubscribe anytime. Nothing in The Callout is legal, tax or HR advice. Whether any specific employee is exempt, and how to classify and pay your crew, is a decision for you and your own employment-law counsel or payroll advisor. This describes a general federal rule; state law and your own facts can change the answer.

Sources

  • U.S. Department of Labor — Final rule, "Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees; Implementation of Federal Court Judgments," 91 FR 27833, published 15 May 2026 (Doc. 2026-09839, RIN 1235-AA57, 29 CFR Part 541). Restores the standard salary level to $684/week ("$35,568 per year for a full-year worker," § 541.600(a)); restores the highly-compensated-employee total annual compensation level to $107,432 (§ 541.601(a)(1)); effective 15 May 2026; implements the court judgments vacating the 2024 rule and removes the vacated text; states the regulations "generally require each of the following three tests" (salary basis, salary level, duties). Read first-hand 7 October 2026. https://www.federalregister.gov/documents/2026/05/15/2026-09839/defining-and-delimiting-the-exemptions-for-executive-administrative-professional-outside-sales-and

  • U.S. Department of Labor — Wage and Hour Division overtime rulemaking page. https://www.dol.gov/agencies/whd/overtime/rulemaking

  • Littler — "Department of Labor Restores Salary Levels for FLSA White Collar Exemptions" (restored EAP $35,568/year, $684/week, and HCE $107,432/year; 2024 rule table: EAP $43,888/year ($844/week) and HCE $132,964; WHD has applied the 2019 thresholds since the 2024 rule was vacated; the amendment provides "formal certainty"). https://www.littler.com/news-analysis/asap/department-labor-restores-salary-levels-flsa-white-collar-exemptions

  • Proskauer, Law and the Workplace — "DOL Makes It Official: 2024 Overtime Rule Is Gone" (final rule scheduled for publication 15 May 2026; 2024 rule set $844/week effective 1 July 2024, then $1,128/week effective 1 January 2025; HCE $132,964 then $151,164; restored $684/week and $107,432 HCE). https://www.lawandtheworkplace.com/2026/05/dol-makes-it-official-2024-overtime-rule-is-gone/

  • Foley Hoag — "DOL Reverses Biden-Era Overtime Rule: What Employers Need to Know" (restored $684/week / $35,568; two federal judges in Texas vacated the 2024 rule, which had raised the threshold to $43,888 with a later step to $58,656; DOL dropped its Fifth Circuit appeal in May 2026; enforcement posture unchanged since vacatur). https://foleyhoag.com/news-and-insights/publications/alerts-and-updates/2026/may/dol-reverses-biden-era-overtime-rule-what-employers-need-to-know/

  • U.S. Department of Labor — 29 CFR § 541.100 (executive exemption duties test) and Fact Sheet #17A, "Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees." Executive duties specifics (primary duty of management; regularly directs at least two full-time employees; authority to hire/fire or recommendations given particular weight) re-read first-hand in Fact Sheet #17A on 23 October 2026. https://www.dol.gov/agencies/whd/fact-sheets/17a-overtime

Load-bearing figures read first-hand on 7 October 2026 (US) / 8 October 2026 (NZDT) from the Federal Register final rule.