Is the federal exempt-salary threshold $58,656?
Do not use that vacated threshold as the operative federal requirement. Effective May 15, 2026, DOL’s technical amendment restored the earlier regulatory text after court judgments invalidated the 2024 rule. The operative standard salary threshold for most covered executive, administrative and professional exemptions is $684 per week, and the highly compensated employee threshold is $107,432 annually. Salary basis and duties remain relevant. Final technical amendment; DOL explanation.
Owner action: Require an exemption review by position, not job title. In particular, ask for actual duties, working hours, salary arrangements and the applicable state-law analysis. Do not book savings from reducing salaries without an employment-law and retention review.
Does “no tax on tips” reduce the hotel’s employer payroll taxes?
It is not a general exemption from employer payroll taxes. IRS guidance continues to require the employer share of Social Security and Medicare taxes on reported tips. The new deduction concerns qualifying income of eligible taxpayers. IRS tips withholding and reporting guidance.
For tax year 2026, IRS guidance specifies separate W-2 reporting for qualified tips using Box 12, code TP, qualified overtime using code TT, and the tipped-occupation code in Box 14b. IRS Publication 505.
Recommended year-end control: Obtain a sample 2026 W-2 output from the payroll provider and reconcile it to payroll records. Have the provider distinguish qualified overtime from total overtime payments and preserve records through any operator migration.