The Overtime Salary Threshold Rules Changed Again — Here’s What Your Business Needs to Know

On May 15, 2026, the Department of Labor (“DOL”) published a technical amendment formally rescinding the 2024 final rule that raised the salary thresholds for overtime exemptions under the Fair Labor Standards Act (“FLSA”). The amendment, which took effect immediately, restored the salary requirements back to where they were in 2019 during President Trump’s first term. Employers should be aware of this change when making determinations about exempt and non-exempt classifications.

A Quick Recap

The 2024 rule had raised the minimum salary for the white-collar exemptions (executive, administrative, and professional exemptions) from $684 per week ($35,568 annually) to $844 per week ($43,888 annually) as of July 1, 2024, with a further planned increase to $1,128 per week ($58,656 annually) scheduled for January 1, 2025. The highly compensated employee threshold was similarly raised from $107,432 to $132,964, with a planned increase to $151,164.

Two federal judges in Texas struck down the 2024 rule in late 2024, and the Fifth Circuit dismissed the government’s appeals.  With these judgments final, the DOL issued the technical amendment to formally restore the prior regulatory text in the federal regulations.

So Where Do Things Stand Now?

As a result of the amendment, the following salary thresholds are now in effect for purposes of the overtime exemptions:

• White-collar exemption threshold: $684 per week ($35,568 per year).
• Highly compensated employee threshold: $107,432 in total annual compensation.

Keep in mind — salary alone doesn’t make someone exempt. Employees still need to meet both the duties test and the salary basis test. Of note, up to ten percent of the required salary can be satisfied through nondiscretionary bonuses, incentives, and commissions, as long as they’re paid at least annually.

What This Means for Employers

If companies raised salaries to stay compliant with the 2024 rule, there is now no federal legal requirement to maintain those higher levels.  However, employers should carefully weigh the practical, employee-relations, and retention implications before reducing any employee’s compensation. Employers should also closely review state law as some states have different salary thresholds.

Employers who reclassified employees as nonexempt when the 2024 rule took effect, because those employees did not meet the salary basis test with the higher salary threshold, may now be able to reclassify employees as exempt if they still meet the duties test.

It is important to note that DOL’s issuance of this amendment does not foreclose the possibility of future notice-and-comment on rulemaking to update the federal regulations.

Employers To-Do List

• Take a fresh look at your classifications. Now is a great time to audit your exempt employees and make sure everyone classified as exempt qualifies — meaning they pass the duties test and earn at least $684 per week on a salary basis. Employees who were reclassified as nonexempt solely because of the 2024 rule’s higher thresholds may be re-evaluated for exempt status.
• Update your systems. Make sure your HR and payroll platforms reflect the right salary thresholds. If you’re moving employees back to exempt status, take them off overtime tracking so you’re not creating confusion (or unnecessary records).
• Don’t forget state and local rules. This is a federal change, but many states and cities have their own overtime salary thresholds, some are higher than $35,568. Employers must always meet the most protective standard that applies.
• Put it in writing. Document your classification decisions, especially the duties-test analysis for each exempt role, to demonstrate compliance in the event of a DOL audit or private litigation.
• Keep an eye on what’s next. The DOL left the door open for future rulemaking, so this area could shift again. Hinckley Allen will monitor this area and provide updates of any proposed rules that could impact the thresholds.

Our Labor & Employment team is here to help — whether you need a full classification audit or a check on a classification decision for a new position, reach out to your Hinckley Allen attorney.

This information is provided for educational purposes only. It should not be construed or relied on as legal advice. It is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication or other legal counsel.