Overtime exemption thresholds have moved, and they will keep moving on a scheduled basis. For most small and mid-sized employers in Arkansas the practical question is narrow: which of your salaried people are now closer to the line than you assumed, and what do you do about it before it becomes a back-pay problem?
What the threshold actually governs
An employee is exempt from overtime only when they clear all three tests: they are paid on a salary basis, that salary meets or exceeds the current threshold, and their actual day-to-day duties fit an exemption category — executive, administrative, professional, outside sales, or certain computer roles.
The mistake we see most often has nothing to do with the dollar figure. It is a title problem: someone is called a "manager," paid a salary, and spends ninety percent of their week doing the same work as the crew. That person is very likely non-exempt regardless of what the salary is.
Who to look at first
Pull the list of every salaried employee within roughly fifteen percent of the threshold. That group is where your exposure lives, and it is usually smaller than people fear.
- Assistant managers and shift leads who work the line or the floor.
- Office coordinators and administrative staff on salary.
- Working supervisors in warehouse, production, and food service.
- Junior salaried roles created during a title inflation cycle.
Your three options for each person
For anyone who no longer clears the tests, you have a straightforward decision, and each choice has a real cost you should calculate rather than guess at.
- Raise the salary above the threshold, if their duties genuinely fit an exemption.
- Reclassify to hourly non-exempt and pay overtime, adjusting the base rate so typical weekly pay lands where you intend.
- Reclassify and restructure the work so overtime is rare, redistributing hours across the team.
Compliance checklist
Work through this before the next pay period rather than after an audit letter.
- Audit every salaried role against the duties test, not just the salary test.
- Document the duties analysis in writing and keep it.
- Confirm your timekeeping system can accurately capture hours for newly non-exempt staff.
- Train reclassified employees on time recording and off-the-clock rules, including email after hours.
- Communicate the change as a legal reclassification, not a demotion — this is where morale is usually lost.
- Review bonus and commission structures, which affect the regular rate used to calculate overtime.
- Recheck annually; thresholds are scheduled to adjust.
Where staffing changes the picture
Employers carrying chronic overtime because they are short-staffed often find that reclassification math makes a temporary or temp-to-hire worker cheaper than the overtime premium they have been paying for months. When we serve as employer of record on temporary staff, wage-and-hour compliance for those workers sits with us, not with you.
This is not legal advice, and a wage-and-hour attorney should review any reclassification decision. But the audit itself is something you can start this week, and it is far cheaper than the alternative. If short staffing is what is driving your overtime, send us your hiring needs and we will help you price the alternative.