FLSA Overtime Rules Just Changed Again

Here's What Illinois Small Businesses Need to Know

The DOL rolled back the 2024 overtime rule in May 2026. Here's what Illinois employers need to know about federal and local wage thresholds before the next audit or complaint.

If you run payroll for a small business, church, or nonprofit in Illinois, you've probably lost track of how many times the overtime rules have changed in the last two years. You're not alone — and the rules just moved again.

What changed

On May 14, 2026, the U.S. Department of Labor published a technical amendment formally rescinding the 2024 final rule that would have raised the federal salary threshold for exempt employees. That rule was already tied up in litigation, so the DOL restored the regulation that had been in place since 2019 (JD Supra; Safeguard Global).

Here's where the federal numbers actually stand right now:

• Standard salary threshold: $684 per week, or $35,568 per year — unchanged since January 2020 (PointFactors).

• Highly compensated employee threshold: $107,432 per year (Safeguard Global).

• Overtime pay: Non-exempt employees still must receive 1.5x their regular rate for any hours worked over 40 in a workweek (FindLaw).

Six states raised their own exemption thresholds above the federal level on January 1, 2026, so if you have remote employees outside Illinois, don't assume the federal number applies everywhere (Payscale).

What this means locally

Illinois follows the federal FLSA overtime structure, but wage floors vary a lot depending on where your team physically works:

Jurisdiction	2026 Minimum Wage
Illinois (statewide)	$15.00/hour (Illinois Dept. of Labor)
Cook County (suburban)	$15.40/hour, effective July 1, 2026 (GovDocs)
Chicago	$17.05/hour, effective July 1, 2026 (GovDocs)
Youth (under 18, <650 hrs/year)	$13.00/hour (Illinois Dept. of Labor)

If you have staff split between South Suburban Cook County and Chicago proper, you may already be out of compliance without realizing it — those two rates diverged again this year.

The mistake we see most often

Job titles do not determine exempt status. Two tests decide it: the salary test above, and a duties test that looks at what the role actually does day to day. Employers who classify someone as "exempt" because they carry a manager title — without confirming the role passes the duties test — are the most common source of wage-and-hour violations in Illinois (LiftHCM).

What to do this quarter

1. Pull your exempt employee roster and confirm every role still passes both the salary and duties tests.

2. Check pay rates against the jurisdiction where each employee actually works, not just your business address.

3. Update your workplace postings — Cook County and Chicago both require updated notices for the July 2026 wage changes (GovDocs).

A misclassification finding doesn't just cost back pay — it costs trust with your team. If you want a second set of eyes on your exempt classifications before the state finds the gap for you, that's exactly the kind of HR essentials work Preston John HR Solutions does for small businesses, nonprofits, and ministries across Chicagoland and nationwide. Schedule a compliance check-in to see where you stand.