Overtime Exemptions in 2026 (The Salary Threshold Reality Check)

 COMPLIANCE NECTAR NOTES: PRACTICAL HR


Dear Biz Bee,

If minimum wage updates are the annual “numbers migration,” overtime exemptions are the year-round trap door. Most organizations don’t intend to misclassify people. It just happens the way it always happens: a role grows, a title changes, someone gets promoted into “manager,” and suddenly payroll is treating them like they’ve crossed into exempt land… while their actual day-to-day work never got the memo.

So let’s clear the air.

“Exempt” is not a compliment. It’s a legal classification. And in 2026, it’s still built on two main pillars:
  1. Salary basis + salary level (the pay requirement)
  2. Duties test (what they actually do)
You need both. Not one. Not “mostly.” Both.

WHAT'S GOING ON
(the practical summary)

The overtime exemption landscape has been noisy because of changes and legal challenges over the past couple years. The most important thing for Practical HR is this:
  • The 2019 federal salary threshold for the “white-collar” exemptions is $684/week ($35,568/year).
  • A 2024 DOL overtime rule that would have increased the threshold was blocked/struck down by a federal court in Texas, and the rule is not currently in effect.
Translation for your hive: many employers are operating under the 2019 threshold again, while still needing to follow the duties tests and any stricter state rules.

And that last part matters: even if you’re compliant federally, your state may have a higher bar.

WHY THIS GETS STICKY FAST

Here are the situations that most often create overtime risk:
  • “Manager” titles with non-manager duties
    • If someone is “Assistant Manager” but spends most of their time doing the same work as the team, the title doesn’t magically exempt them.
  • Salary increases without duties changes
    • Paying someone salary doesn’t make them exempt. It just makes them salaried.
  • Remote/hybrid work increasing after-hours time
    • Slack after dinner. Email on weekends. “Just quick tasks.” That time counts if they’re non-exempt, and it can add up.
  • Small teams where everyone does everything
    • In lean orgs, “exempt” roles often still do a lot of hands-on work. That doesn’t automatically disqualify exemption, but it makes the duties test worth a closer look.
THE PRACTICAL HR WAY TO AUDIT EXEMPTIONS
(without starting a war)

You don’t need a massive project to reduce risk. You need a consistent checklist and a calm process.

Step 1: Pull a simple “Exempt Snapshot”

Start with a list of all exempt employees and capture:
  • Job title
  • Department
  • Base salary
  • Work location/state
  • Manager status (do they truly supervise?)
  • Job description on file (and when it was last updated)
This is not about accusing anyone. It’s just… hive housekeeping.

Step 2: Confirm salary level (federal + state)

At the federal level, the current reference point is:
  • $684/week ($35,568/year) for most white-collar exemptions
Then check whether your state has stricter thresholds or different exemption rules. (Many do.)

Step 3: Reality-check the duties test (the part everyone avoids)

This is where HR earns its honey.

Ask:
  • What percentage of time is spent on core exempt duties versus hands-on production work?
  • Do they have real authority (hiring, firing, meaningful recommendations)?
  • Are they doing independent judgment, or following set scripts/processes?
If you want the simplest Practical HR lens:
If their week looks like a non-exempt role with a fancier title, pause and review.

Step 4: Check overtime exposure even if you “trust” the classification

Even properly classified employees can create risk if:
  • Job descriptions are outdated
  • Work patterns changed (new schedules, new workload, new tools)
  • Managers assign “off the clock” tasks to hourly employees
This is why compliance isn’t a one-time decision. It’s a living system.

QUICK "STING PREVENTION" LIST
(common mistakes)

These are the biggest ways organizations get in trouble:
  • Thinking salary = exempt (it does not)
  • Believing titles matter more than duties (they don’t)
  • Forgetting state rules can be stricter than federal
  • Letting job descriptions collect dust while roles evolve
  • Allowing “just respond quickly” culture for hourly employees

WHAT TO DO NEXT WEEK
(3 simple moves)

If you want an easy starting point, do these:
  • Run an exempt roster audit (titles, salaries, states, job descriptions)
  • Spot-check your “borderline” roles (assistant managers, coordinators, leads)
  • Refresh one job description template to better capture actual duties and decision-making
Small moves. Big risk reduction.

When your exemption classifications are clean, everything else gets cleaner too: payroll, morale, expectations, and manager behavior.

If you want an exemption audit tracker template for this, reply “tracker” and I’ll build it.

Yours truly,
The HR Queen Bee 🐝


Updated: January 2026.

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