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.