The federal overtime exemption rule has changed again.
On May 14, 2026, the U.S. Department of Labor announced a technical amendment to the federal overtime exemption regulations under the Fair Labor Standards Act, commonly called the FLSA. In plain English, the DOL removed the 2024 rule language and restored the 2019 salary thresholds.
That means the federal salary threshold for many exempt executive, administrative, and professional employees is back to $684 per week, or $35,568 per year. The federal threshold for highly-compensated employees is back to $107,432 per year.
For employers, this may sound like good news because the federal salary threshold is lower than it would’ve been under the 2024 rule. But New York employers shouldn’t get too comfortable. New York State has its own rules, and for many executive and administrative employees, New York’s salary thresholds are much higher than the federal threshold.
Here’s what employers need to know.
Defining the Overtime Exemption
The FLSA generally requires covered employers to pay non-exempt employees overtime when they work more than 40 hours in a workweek. Overtime usually means time and one-half the employee’s regular rate of pay.
But not every employee is entitled to overtime. Certain employees may be exempt from overtime if they meet specific legal tests.
The most common white collar exemptions are for:
- Executive employees
- Administrative employees
- Professional employees
- Certain highly compensated employees
This is where employers often get into trouble. A job title alone doesn’t make someone exempt. Calling someone a manager doesn’t make them exempt. Paying someone a salary doesn’t automatically make them exempt either.
To properly classify an employee as exempt, the employee generally must satisfy both a salary test and a duties test.
The Federal Law Changes
The 2024 federal overtime rule would’ve increased the salary threshold for exempt executive, administrative, and professional employees. It also would’ve increased the highly-compensated employee threshold and created automatic updates every three years.
But federal courts vacated the 2024 rule. In response, the DOL issued a technical amendment restoring the 2019 thresholds.
As of May 15, 2026, the federal thresholds are:
- $684 per week, or $35,568 per year, for most exempt executive, administrative, and professional employees
- $107,432 per year for highly compensated employees, including at least $684 per week paid on a salary or fee basis
This doesn’t really create a brand-new standard. Instead, it formally updates the regulations to reflect what already happened after the 2024 rule was vacated.
Why New York Employers Need to Be Extra Careful
For New York employers, the federal rule is only part of the story.
As we know, New York has its own wage and hour rules. For executive and administrative employees, New York’s salary thresholds are higher than the federal threshold.
That means a New York employee might satisfy the federal salary threshold but still fail to qualify as exempt under New York law, and that opens up the employer to risk.
For 2026, New York’s salary thresholds for executive and administrative employees are:
- $1,199.10 per week for employees in most of New York State
- $1,275.00 per week for employees in New York City, Long Island, and Westchester
So, for many New York employers, the practical question isn’t just “does this employee make at least $684 per week?”
The better question is “does this employee satisfy the applicable federal and New York exemption tests?”
That’s a much more important question.
The Duties Test Still Matters
Salary is only one piece of the exemption analysis. The employee’s actual job duties matter too.
For example, an executive employee generally must have management as a primary duty, regularly direct the work of at least two full-time employees or their equivalent, and have real authority or meaningful input over hiring, firing, promotion, or similar employment decisions.
An administrative employee generally must perform office or non-manual work directly related to management or general business operations and must exercise discretion and independent judgment on significant matters. While traditionally employers thought that administrative assistants fall under this category, that’s often not the case, given the requirement that the employee must exercise discretion and independent judgment on significant matters in order to qualify.
A professional employee generally must perform work requiring advanced knowledge in a field of science or learning, usually acquired through prolonged specialized instruction. Creative professionals may qualify if their primary duty involves invention, imagination, originality, or talent in a recognized creative field.
The key point is simple: employers need to look at what the employee actually does, not just what the job description says.
Common Employer Mistakes
Here are some mistakes we see often:
- Treating all salaried employees as exempt
- Assuming a manager title is enough
- Using outdated job descriptions that don’t match the employee’s real work
- Forgetting that New York law may require a higher salary threshold
- Classifying assistant managers as exempt when they spend most of their time doing the same work as hourly employees
- Failing to revisit classifications when job duties change
- Not tracking hours for employees whose exempt status is questionable
These mistakes can get expensive quickly. Misclassification can lead to unpaid overtime claims, liquidated damages, attorneys’ fees, penalties, and DOL scrutiny.
What Should Employers Do Now?
Employers should use this federal rule change as a reason to review exempt classifications.
Start with the employees currently classified as exempt. Then ask:
- Are they paid enough under both federal law and New York law?
- Do their actual duties satisfy the exemption?
- Does the job description match the work they really perform?
- Are assistant managers, office administrators, coordinators, and working supervisors classified correctly?
- Are you tracking time for employees whose classification may be uncertain?
- Have salaries or duties changed since the last review?
This isn’t just a payroll issue. It’s an HR, operations, and legal compliance issue.
Practice Pointers for New York Employers
1. Don’t rely on the federal salary number alone.
The federal threshold is back to $684 per week, but New York’s executive and administrative thresholds are much higher.
2. Review duties, not just salaries.
A salary gets you only part of the way there. The employee’s real day-to-day work is what matters.
3. Be careful with manager titles.
A title doesn’t decide exempt status. Authority, judgment, supervision, and actual job duties do.
4. Update job descriptions.
If the job description doesn’t match the job, fix it. Outdated descriptions can hurt you in a wage and hour dispute.
5. Revisit close calls before there’s a claim.
If you’re unsure whether someone is exempt, don’t wait for a complaint, audit, or lawsuit to find out.
Bottom Line
The federal overtime exemption salary threshold is back to the 2019 level, but New York employers still have to deal with higher state-law thresholds and detailed duties tests.
So, no, this isn’t a reason to stop paying attention. It’s a reason to double-check your classifications now. Wage and hour mistakes are some of the most preventable employment-law problems. They’re also some of the most expensive when ignored.
We help New York employers review classifications, update job descriptions, and make practical decisions before small problems become costly ones.
Contact The Coppola Firm at info@coppolalegal.com or 716.839.9700 with any questions.
