The $684 Overtime Threshold Is Back: Reclassify Exempt Employees Without Guessing
The restored threshold is the starting line, but the duties test still decides who is exempt.
If your exempt payroll was set to the 2024 rule, the first screen changes. The Department of Labor's May 14, 2026 technical amendment restored the 2019 FLSA salary levels for the executive, administrative, and professional exemptions after courts vacated the 2024 overtime salary-threshold rule. The amendment does not create a new exemption. It asks for a recheck of the two screens that already exist. The recheck should be a payroll task, not a legal memo.
The restored levels change the first screen
The vacated 2024 rule had set the standard salary level at $844 per week effective July 1, 2024, with a scheduled increase to $1,128 per week on January 1, 2025. It had also set the highly compensated employee (HCE) annual compensation level at $132,964, with a scheduled increase to $151,164 on January 1, 2025. If a salary was set to the 2024 level, it may still clear the restored floor, but the file should be checked against the operative numbers. The payroll question is who remains exempt under the lower restored levels.
Salary first, duties second
An employee is not exempt solely because the $684-per-week salary level is met; the FLSA duties and salary tests under Part 541 still apply. Start with pay because it is the easiest fact to verify. If the employee is below the applicable salary or compensation level, the duties test does not rescue the exemption. It looks at the work performed, not the job title. A manager who is paid above the floor but spends most of the time on production work may fail the duties test. Pay alone cannot cure a duties failure.
Fix only the employees who fail
The reclassification pass should be narrow. Do not rewrite every exempt job description because the federal levels changed. Do not raise every salary to a comfort number. A broad rewrite creates more work than a targeted fix. The pass should touch only the employees whose pay or duties no longer support the exemption. The order keeps the work small and the file defensible. HR leads and founders should own the pass. Payroll should receive the decision before the next run.
Document the decision before payroll runs
Documentation is good practice. It makes the decision defensible. A short note is better than no note. Capture the pay amount, the exemption claimed, the duties considered, and the person who reviewed the file. The note should be short enough to read in a payroll audit. The note should say why the employee is exempt or what changed if the employee is not. Keep the old job description, the new classification, and the effective date in the same file.
The worksheet should follow the order above. Use the list below as the reclassification worksheet. Each item is a yes/no check.
- Confirm the employee's regular weekly salary is at least $684.
- If the HCE exemption is claimed, confirm total annual compensation is at least $107,432.
- Apply the Part 541 duties test to actual duties, not the title.
- Record the salary figure, the duties reviewed, and the exemption relied on.
- Change payroll or the job classification only for employees who fail either screen.
If an employee clears both screens, leave the classification alone. If one screen fails, choose the fix that matches the failure: pay, duties, or classification. The memo records that the legal test was run, not that the employee is exempt. A clean file shows the salary screen, the duties screen, and the decision. Payroll should see the updated status before the next run.