New Overtime Salary Threshold Changes in 2026

Proposed updates to federal overtime regulations are expected to raise the salary threshold that determines whether an employee qualifies as exempt or non-exempt. If finalized, this means more employees could become eligible for overtime pay based solely on their salary level.

While the exact figures are still being finalized, the direction is clear: employers should start preparing now.

What’s Changing?

Under current federal rules, certain salaried employees are exempt from overtime if they meet both:

• A duties test, and
• A minimum salary threshold

The proposed changes would increase that salary threshold. Employees who fall below the new limit—even if they were previously exempt—may now qualify for overtime pay.

Why This Matters for Employers

If these changes take effect, businesses may need to:

• Reclassify some employees
• Adjust compensation structures
• Track hours for roles that previously didn’t require it
• Review payroll processes to ensure compliance

Failing to prepare could lead to misclassification issues, payroll errors, and potential penalties.

What You Can Do Now

Even before final rules are announced, employers can take proactive steps:

• Review current exempt vs. non-exempt classifications
• Identify employees near the current salary threshold
• Evaluate how overtime changes could impact payroll costs
• Make sure your payroll system can support accurate time and wage tracking

Stay Ahead of What’s Next

Regulatory changes don’t have to be disruptive—but they do require attention.

At Brand’s Payroll, we help employers stay compliant, informed, and ready for what’s ahead, so changes like these don’t catch you off guard.

Want help preparing for upcoming overtime changes? Contact us to start the conversation.