On May 14, 2026, the U.S. Department of Labor (DOL) announced the publication of a technical amendment that will officially rescind the DOL’s 2024 overtime rule, which sought to increase the exempt salary threshold under the federal Fair Labor Standards Act (FLSA), and reinstate the agency’s 2019 rule.
Federal Overtime Rule Recap
In 2019, the DOL adopted an overtime rule that set the federal white-collar exempt salary threshold at $684 per week (equivalent to $35,568 per year), raising it from the prior threshold of $455 per week established in 2004.
On April 26, 2024, the DOL, under then-President Biden, published a final rule to expand overtime eligibility by establishing a new weekly salary threshold for exempt employees. It would have raised minimum white-collar salary thresholds under federal law to $844 per week (equivalent to $43,888 per year) on July 1, 2024, and then again on January 1, 2025, to $1,128 per week (equivalent to $58,656 per year) followed by automatic increases every three years.
Facing numerous legal challenges, a federal court concluded that the 2024 overtime rule exceeded the DOL’s authority under the FLSA and vacated the rule on November 15, 2024. The DOL appealed the decision to the Fifth Circuit Court of Appeals. The court’s decision to vacate the 2024 rule appeared to revert exempt salary thresholds back to the 2019 level, though employers faced uncertainty while litigation was pending.
Under the current Trump administration, the DOL changed its position. While the case was pending before the Fifth Circuit, the DOL filed a motion to pause its appeal, indicating that, due to the recent change in federal administration, the department intended to reconsider the rule. Given the DOL’s motion, it comes as no surprise that the agency officially rescinded the 2024 rule and reinstated the 2019 rule.
What This Means for Employers
The DOL’s amendment is largely procedural and doesn’t change the current status quo under federal law that has been in place since the 2024 rule was vacated. It does, however, officially take the 2024 rule off the books, clearing up any lingering uncertainty regarding FLSA overtime exemption thresholds. Businesses considering exempt classification status under the FLSA should continue to use the 2019 threshold of $684 per week/$35,568 per year.
California employers, however, should keep in mind that FLSA rules carry little weight for them because California’s white-collar exemption salary threshold is higher than federal law. California’s exempt employee standard requires employers to pay two times the current applicable statewide minimum wage, which is currently $5,858.67 per month, equivalent to $70,304 per year — substantially higher than the current FLSA salary threshold.
Also, because the California minimum wage increases by law every January 1, the white-collar exemption salary threshold increases every year.
James W. Ward, J.D., Employment Law Subject Matter Expert/Legal Writer and Editor, CalChamber
CalChamber members can read more about Exempt Employee Status and Understanding Basic Overtime Requirements in the HR Library. Not a member? See how CalChamber can help you.
