If you only have ten minutes this month, here is what moved and who it affects. Two of these are federal, one is Colorado-specific, and only one is likely to touch your day-to-day right now.
1. Federal overtime: the salary threshold is settled at $35,568
The long saga over the federal overtime salary threshold is over, and it landed right back where it started. On May 14, 2026, the U.S. Department of Labor issued a technical amendment that formally restores the 2019 salary levels for the executive, administrative, and professional (white-collar) exemptions under the Fair Labor Standards Act. The amendment was published in the Federal Register and took effect May 15, 2026.
In the DOL's own words, "the restored regulations require that most exempt executive, administrative, and professional employees be paid a salary of at least $684 per week," which works out to $35,568 a year. The threshold for highly compensated employees is back to $107,432. The 2024 rule that would have raised those numbers to $58,656 and $132,964 was struck down in court in November 2024, so for most employers nothing actually changes today. The paperwork just caught up with reality.
The FLSA reaches nearly every employer, so this applies broadly. But salary is only half the test. An employee is exempt only if they earn at least $684 a week and their actual job duties meet the exemption test. We walked through that in detail in our breakdown of the rescinded overtime rule.
2. Federal contractors: a narrow minimum wage bump to $13.65
Effective May 11, 2026, the minimum wage for certain federal contractors rose to $13.65 an hour, with a $9.55 cash wage for tipped workers, under Executive Order 13658. This is an annual inflation adjustment, not a new rule.
The key word is "certain." This rate applies only to a narrow band of older federal contracts, specifically Service Contract Act and Davis-Bacon contracts awarded between January 2015 and late January 2022 that have not been renewed since. If you do not hold federal contracts, this does not apply to you, and the regular federal minimum wage of $7.25 (or your higher state or local rate) is what governs. If you do hold or bid on covered federal contracts, this is a payroll line to check before your next pay run.
3. Colorado's AI hiring law: delayed, rewritten, and on hold
If you have been bracing for Colorado's sweeping AI hiring law, you can exhale for now. The original Colorado AI Act (SB 24-205) was set to be the first broad state law governing AI in employment decisions. It never took effect. Colorado lawmakers replaced it with a narrower law (SB 26-189), which the governor signed on May 14, 2026, and a federal court paused enforcement of the original law in late April.
The replacement law does not take effect until January 1, 2027, and even then its enforcement depends on the state attorney general finishing rulemaking. So right now there is no active Colorado AI compliance obligation. What still applies, in Colorado and everywhere else, is the rule that has always applied: if an AI tool screens people in a way that disadvantages a protected group, that is discrimination, the same as if a hiring manager did it by hand. The smart move is to keep January 1, 2027 on your radar and document how any AI tools in your hiring process actually make their decisions.
What to do this month
- Confirm your exempt classifications. Make sure every exempt employee earns at least $684 a week ($35,568 a year) and that their duties genuinely meet the exemption test. Salary alone never makes someone exempt.
- Check your state's overtime threshold. Several states, including California, New York, and Washington, set higher salary floors than the federal number. Your state figure governs whenever it is higher.
- If you hold federal contracts, update payroll. Verify covered workers are at $13.65 an hour ($9.55 tipped) as of May 11, 2026.
- If you use AI in hiring, write down how it works. No Colorado action is required yet, but a short record of what your tools do and how you check them for bias will save you a scramble when the 2027 rules and enforcement arrive.
Audit your exempt employee classifications on the duties test, not just the salary number. Misclassifying a salaried worker as exempt is the most common and most expensive wage-and-hour mistake, and it has nothing to do with which year's threshold is in effect.
Where this touches your compliance setup
All three updates are already reflected in your HR Compliance Compass cards, so the guidance you see in the app is current as of this month. The overtime thresholds sit on the federal overtime card, the contractor wage note sits with the federal minimum wage card, and the Colorado AI card now shows the delayed 2027 timeline instead of an outdated deadline.
What HRCC does about this: the FLSA Exempt Status & Duties Test walks you through whether a specific employee actually qualifies as overtime-exempt, the Compliance Wizard keeps the federal and state thresholds in one place by jurisdiction, and Future of Work & AI helps you think through responsible AI use in hiring before the Colorado rules land. Try it free for 14 days.
Sources
U.S. Department of Labor, technical amendment restoring the 2019 white-collar exemption thresholds (May 14, 2026). · U.S. Department of Labor, Executive Order 13658 federal contractor minimum wage (rate effective May 11, 2026). · Colorado General Assembly, SB 24-205, replaced by SB 26-189 (signed May 14, 2026, effective January 1, 2027).