The Overtime Rule Just Changed Again: What Wisconsin Employers Need to Know for 2026
Most Wisconsin business owners spent 2024 bracing for a higher overtime salary threshold. Then a federal court vacated it. Then it sat in limbo for over a year. Now, in 2026, the Department of Labor has quietly reversed course again, and a lot of employers do not know which number actually applies to them right now.
What Actually Changed
In 2024, the Department of Labor finalized a rule raising the salary threshold for the “white collar” overtime exemptions (executive, administrative, and professional employees) to $844 per week, roughly $43,888 per year, with a further increase to $1,128 per week scheduled for January 2025. A federal court in Texas vacated that rule in November 2024, before the second increase ever took effect.
In May 2026, the Department of Labor made it official: it published a technical amendment restoring the older, lower threshold of $684 per week, about $35,568 per year. The threshold for highly compensated employees dropped back to $107,432 as well. That is the standard currently in effect.
Why This Matters More Than It Sounds
If you raised anyone's salary in the last two years specifically to clear the higher threshold that never went into effect, you are now paying more than the law requires for that exemption to hold. That may still be the right call for retention. But it should be a decision you are making on purpose, not one you are still making because of a rule that got struck down eighteen months ago.
If you have anyone classified as exempt sitting close to $35,568 a year, this is the number that matters now, not the higher figure that got so much attention in 2024. And salary alone has never been the whole test. An employee earning above the threshold who is still primarily doing non-exempt work does not become exempt just because of the paycheck.
What to Check Right Now
A few things worth confirming before this becomes a problem instead of a housekeeping item:
Every salaried exempt employee is actually above $35,568 per year, and above $107,432 total compensation if you are relying on the highly compensated employee exemption.
Job duties still match the exemption category on paper. A title alone does not create an exemption. What the person actually spends their time doing does.
Wisconsin does not layer on a separate state salary threshold, so this is genuinely the number to track. That is not true in every state, which is worth knowing if you have any remote employees working outside Wisconsin.
The Real Risk
Overtime misclassification is one of the more expensive mistakes a small or mid-sized business can make, because it rarely surfaces as a single incident. It surfaces as back pay owed to every employee who was misclassified, going back as far as the applicable statute of limitations allows. A rule change is exactly the moment those errors get introduced, because assumptions that were correct in 2023 quietly stop being correct without anyone deciding to change them.
If your last classification review predates this year, it is worth a second look before the next payroll cycle, not after an employee asks a question you cannot answer with confidence.
This article is part of our HR Support & Insights for Wisconsin Businesses resource hub.
