Correction — August 29, 2026. An earlier version of this article presented the $58,656 salary threshold from the Department of Labor's 2024 overtime rule as being in effect for 2026. It is not. That rule was vacated by a federal court, and on May 14, 2026 the DOL formally restored the 2019 thresholds: $684 per week ($35,568 per year), with a highly compensated employee threshold of $107,432. The article below has been rewritten to reflect the current rule and the story of how we got here — which matters more to your payroll than any single number.
Ask ten contractors what the overtime exemption threshold is right now and you will get at least three different answers — $35,568, $43,888, and $58,656 — because all three were "the rule" at some point in a twenty-month stretch. Here is the whole arc, and where it actually landed.
The Short Version
The Fair Labor Standards Act lets employers treat certain salaried workers as exempt from overtime if they pass two tests: a salary test and a duties test. The number everyone argues about is the salary test.
- Today's threshold: $684/week — $35,568/year. Below it, an employee gets time-and-a-half past 40 hours no matter what their title says.
- Highly compensated employee (HCE) threshold: $107,432/year.
- The 2024 rule that would have pushed the standard threshold to $58,656 (and the HCE level to $151,164) never survived. A federal court vacated it, and on May 14, 2026 the DOL restored the 2019 thresholds.
There is no construction-industry exemption at any threshold, and the duties test never changed.
How We Got Three Numbers in Two Years
April 2024. The DOL finalizes a rule raising the exempt salary threshold in two steps: $43,888 on July 1, 2024, then $58,656 on January 1, 2025, with automatic increases every three years. Construction HR departments start re-budgeting: the rule would have reclassified an estimated 148,000 construction employees — assistant superintendents, junior PMs, field engineers, junior estimators — from exempt to overtime-eligible.
July 2024. The first step takes effect. Many contractors raise salaries to $43,888 or convert borderline roles to hourly.
November 2024. A federal district court in Texas vacates the entire 2024 rule nationwide — including the July step that had already taken effect — holding that the DOL exceeded its authority by setting a salary level so high it displaced the duties test. Legally, the threshold snaps back to the 2019 rule's $684/week.
May 14, 2026. After the appeal is dropped, the DOL formally restores the 2019 thresholds: $684/week ($35,568/year) standard, $107,432 HCE. That is the rule you comply with today.
What This Means If You Already Made Changes
This is the part that actually bites. Thousands of contractors moved in 2024 — and wage decisions are a one-way ratchet.
If you raised salaries to clear $43,888 or $58,656: you cannot quietly claw that back. Cutting pay for supervisors and junior PMs is legal in most states with notice, but it is a retention grenade in a labor market where experienced field leadership is the scarcest input on any job. Most firms are living with the raises and treating them as pulled-forward compensation.
If you converted salaried roles to hourly: those employees are non-exempt now, tracking hours, and earning overtime. You may reclassify them back to exempt if they clear $35,568 and genuinely pass the duties test — but do the duties analysis honestly. A "superintendent" who spends six hours a day installing alongside the crew was misclassified at every threshold.
If you did nothing: you were accidentally right. The threshold is $684/week, exactly where it was in 2023.
The Duties Test Still Decides the Close Calls
At $35,568, the salary test screens out fewer people, which makes the duties test the main event again. To stay exempt, an employee must actually perform exempt work:
Executive exemption — primary duty is managing the enterprise or a recognized department; customarily directs two or more full-time employees; has real hiring/firing input.
Administrative exemption — primary duty is office or non-manual work directly related to management or business operations, with discretion and independent judgment on significant matters.
Professional exemption — primary duty requires advanced knowledge acquired by prolonged specialized instruction.
Construction is where duties-test cases go to get expensive, because so many "salaried supervisors" split their day between managing (exempt) and producing (non-exempt). A working foreman earning $40,000 who swings a hammer most of the day is owed overtime — his salary clearing the threshold does not save the classification.
Safety note: Overtime fatigue is a documented contributor to construction injuries. NIOSH research shows injury risk rises sharply after the 8th hour of work and roughly doubles after 12. Whatever the exemption threshold does, a 55-hour-a-week schedule is a safety exposure — and OSHA's incident investigations increasingly look at hours worked. Time records you keep for wage compliance double as your fatigue-management evidence.
State Law Is Now the Binding Constraint
With the federal threshold back at $35,568, several states set a higher bar — and you comply with whichever standard is most protective for each employee's work location:
- California: daily overtime after 8 hours (double time after 12), and an exempt salary minimum of twice the state minimum wage annualized — far above the federal threshold.
- New York: higher exempt thresholds, highest in NYC, Long Island, and Westchester.
- Washington: a state threshold tied to a minimum-wage multiplier that increases annually.
- Colorado: the COMPS Order sets its own exempt salary floor ($1,111.23/week in 2026) and daily overtime past 12 hours.
- Alaska and Nevada: daily overtime rules for non-exempt workers (Nevada's applies only to employees earning under 1.5× the state minimum wage — $18.00/hour).
If you run crews in any of those states, the federal restoration changed little for you; the state rule was already the one writing the checks. Our overtime calculator carries presets for the federal rule plus California, Alaska, Colorado, and Nevada.
Record-Keeping: Keep What 2024 Forced You to Build
Non-exempt employees require FLSA time records: daily and weekly hours, the regular rate, weekly overtime earnings, and total wages per pay period, retained for three years. Contractors who stood up time-tracking systems during the 2024 scramble should keep them running even for employees flipped back to exempt — they are cheap insurance in a misclassification dispute and the raw data for job costing.
Enforcement math has not softened: back wages, liquidated damages equal to the back wages, civil penalties for repeat or willful violations, and a two-to-three-year lookback. Ten misclassified employees averaging ten unpaid overtime hours a week are a six-figure exposure before legal fees.
What to Do Now
- Re-audit classifications against the real thresholds — $684/week federal, or your state's higher number. Document the duties analysis for every exempt role under ~$60,000.
- Do not reverse 2024 raises casually. Price the retention risk before touching field leadership pay.
- Decide deliberately on 2024 hourly conversions — leave them non-exempt, or reclassify only where the duties test truly holds.
- Watch for the next rule. The DOL has signaled it may revisit the salary methodology. The vacatur fight settled this round, not the question. Any future increase will arrive with months of notice — enough time to plan if you keep classifications clean now.
If you employ crews at these rates, our free labor burden calculator shows what an hourly wage really costs you, and the overtime calculator handles the time-and-a-half math — including the state daily-overtime rules.
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Frequently Asked Questions
What is the FLSA overtime salary threshold in 2026?
$684 per week — $35,568 per year. The 2024 rule that would have raised it to $58,656 was vacated by a federal court, and the DOL formally restored the 2019 thresholds on May 14, 2026. The highly compensated employee threshold is $107,432. Salaried employees earning below the threshold are overtime-eligible regardless of their duties.
Did the $58,656 overtime threshold ever take effect?
No. It was scheduled for January 1, 2025 as the second step of the DOL's 2024 rule, but a federal district court vacated the entire rule nationwide in November 2024 — including the $43,888 first step that had briefly taken effect in July 2024. Employers who raised salaries to meet those numbers were responding to a rule that no longer exists.
Do I have to pay overtime to a salaried construction supervisor?
If the supervisor earns less than $35,568, yes — automatically. Above that, it depends on the duties test: they must genuinely manage (direct two or more full-time employees, carry real hiring/firing input) rather than primarily perform production work. Many working foremen and assistant superintendents fail the duties test at any salary, and state thresholds in California, New York, Washington, and Colorado are higher than the federal one.
