Department of Labor Restores Salary Levels for FLSA White Collar Exemptions

Why It Matters

Restoring the 2019 thresholds provides certainty for millions of employers and workers, reducing compliance risk and preventing costly litigation. It also signals the new administration’s intent to roll back the previous administration’s expansive overtime reforms.

Key Takeaways

• DOL restores 2019 salary thresholds for FLSA white‑collar exemptions.
• Executive, admin, professional exemption now $35,568 annually, $684 weekly.
• Highly compensated employee threshold reduced to $107,432 per year.
• Employers gain regulatory certainty after 2024 rule vacated.
• State laws may still impose higher salary or duties requirements.

Pulse Analysis

The 2024 overtime rule, which lifted the salary floor for executive, administrative and professional (EAP) employees to $43,888 a year, was struck down by a Texas federal court and subsequently abandoned by the Labor Department. The May 2026 technical amendment does more than merely rescind the vacated rule; it codifies the 2019 thresholds, ensuring that the regulatory text aligns with the enforcement practice that had already reverted to the lower levels. This move eliminates the regulatory limbo that many mid‑size firms faced while trying to balance payroll budgets against uncertain overtime liability.

For employers, the restored $35,568 annual threshold (or $684 weekly) for EAP exemptions represents a modest salary floor that many organizations already meet, especially in sectors such as finance, technology and professional services. The highly compensated employee (HCE) benchmark also falls back to $107,432, easing the burden on senior talent pools that previously risked reclassification as non‑exempt. Companies must still verify that employees satisfy the salary‑basis and duties tests, but the clear, lower salary line reduces the need for costly re‑classification audits and mitigates the risk of wage‑and‑hour lawsuits.

Nevertheless, the federal rollback does not erase state-level overtime regimes, many of which maintain higher salary thresholds or stricter duties criteria. States like California and New York continue to enforce more expansive exemption standards, meaning multinational firms must navigate a patchwork of rules. Legal counsel should audit existing job classifications, update payroll systems, and monitor any future federal or state proposals that could again shift the exemption landscape. The DOL’s amendment, while stabilizing the current environment, underscores the importance of proactive compliance strategies in a jurisdictionally complex market.