DOL Rescinds Biden-Era Overtime Expansion, Restoring 2019 White-Collar Thresholds, 6-10-2026

The U.S. Department of Labor (DOL) recently formally rescinded the Biden-era overtime rule that would have expanded overtime eligibility for millions of “white-collar” salaried workers under the Fair Labor Standards Act (FLSA).

Through a technical amendment published in the Federal Register on May 15, 2026, the DOL removed the 2024 overtime rule’s regulatory language and restored the 2019 salary thresholds for executive, administrative, and professional (EAP) exemptions.

The amendment is largely procedural, as the 2024 rule was previously vacated by federal courts in Texas in November 2024, and the DOL subsequently withdrew its appeal in the Fifth Circuit in May 2026. Employers now return to the 2019 standard: a weekly salary threshold of $684 (approximately $35,568 annually) for most white-collar exemptions, with the highly compensated employee (HCE) threshold at $107,432 annually.

This change represents an employer‑favorable development, as it provides greater certainty regarding exempt classification standards and avoids the operational and payroll adjustments employers had anticipated under the 2024 rule.

What the Biden-Era Rule Would Have Done
The DOL’s April 2024 final rule aimed to significantly raise the salary thresholds for EAP exemptions to expand overtime coverage. Under the Biden rule, the minimum salary would have increased in two stages: first to $844 per week ($43,888 annually) on July 1, 2024, and then to $1,128 per week ($58,656 annually) on January 1, 2025. The HCE threshold would have risen to $151,164 annually as of January 1, 2025, with automatic triennial updates based on wage data. This would have expanded overtime eligibility for a significant number of salaried employees under the FLSA, potentially requiring employers to reclassify employees or adjust compensation structures.

Why the Rule Was Rescinded
The 2024 rule faced immediate legal challenges, with the U.S. District Court for the Eastern District of Texas vacating it in November 2024 on grounds that the DOL exceeded its statutory authority under the FLSA to set such thresholds. The Fifth Circuit later dismissed the DOL’s appeal after the Trump administration’s Wage and Hour Division (WHD) stipulated to drop the case, signaling the rule’s demise. The May 15 technical amendment, published in the Federal Register as a final rule and technical amendment, formally removes the 2024 language from 29 C.F.R. Parts 541 and 778, restoring the 2019 regulation. The DOL emphasizes this does not alter current enforcement practices, as WHD had already been enforcing the 2019 thresholds following the rule’s vacatur. The DOL describes this as a technical correction aligning the regulations with the court’s vacatur rather than a new policy reversal. For employers, however, the practical result is the same: the 2019 thresholds are back, and the compliance landscape is more certain.

Practical Implications for Employers
With the 2019 thresholds reinstated, employers covered by the FLSA must ensure that exempt EAP employees meet the $684 weekly salary requirement, pass the duties test for executive, administrative, or professional roles, and satisfy the salary-basis test. The HCE exemption remains available for employees earning at least $107,432 in total annual compensation, including at least $684 per week paid on a salary or fee basis. This provides clarity for payroll and classification decisions, though employers should still review applicable state wage-and-hour laws, including jurisdictions such as California and New York that impose higher salary thresholds for certain exempt employees.

Employers should also recognize that the 2019 thresholds remain subject to potential future rulemaking. As a result, employers should continue monitoring developments from the DOL and state labor agencies, particularly as wage-and-hour enforcement priorities and exemption standards may continue to evolve.

Labor and Union Considerations
While the rescission primarily affects exemption thresholds, it has implications for labor relations. Unions and worker advocacy groups had supported the Biden‑era rule as a way to broaden overtime eligibility and increase pressure on employers to raise pay or adjust hours, especially in sectors such as retail and nonprofits. The restoration of the 2019 threshold may reduce some of that pressure, but employers should still anticipate that unions may continue to use overtime‑related issues in organizing campaigns or collective bargaining.

Employers should therefore monitor union‑organizing activity, maintain clear and consistent overtime policies, and ensure compliance with the National Labor Relations Act when responding to employee concerns or union outreach.

Next Steps for Employers to Consider:

• Conduct a wage and hour audit to confirm exempt classifications against the 2019 thresholds.
• Update employment policies and offer letters to reflect current FLSA standards.
• Consult state-specific rules for higher thresholds in other jurisdictions.

Authors:
Megan Beloff
Attorney

Keith J. Gutstein
Chair of the Labor & Employment Law Practice Group
Co-Managing Partner of KD’s Woodbury, NY Office