🗞️ The Clock Rolls Back: DOL Restores 2019 Overtime Thresholds, Leaving Millions Without Expanded Protections

On May 14, 2026, the U.S. Department of Labor's Wage and Hour Division published a technical amendment formally restoring the overtime exemption salary thresholds established under the 2019 rule. The action closes the book on a regulation issued during the Biden administration that a federal court vacated in November 2024, reverting the governing standard for which salaried workers qualify for overtime pay under the Fair Labor Standards Act.

The now-restored thresholds require that most salaried executive, administrative, and professional employees earn at least $684 per week, roughly $35,568 per year, to be classified as exempt from overtime. A separate threshold for highly compensated employees is set at $107,432 annually. Workers who earn below those figures generally must be paid time-and-a-half for any hours worked beyond 40 in a week.

The 2024 rule had sought to raise those figures substantially, first to $43,888 per year in July 2024 and then to $58,656 per year beginning January 1, 2025, with automatic increases every three years thereafter. The Department of Labor estimated at the time that the changes would have extended overtime protections to approximately 4.3 million workers and transferred roughly $1.5 billion annually from employers to employees in the form of additional wages.

That effort was struck down when U.S. District Judge Sean Jordan of the Eastern District of Texas vacated the rule nationwide on November 15, 2024, ruling that the DOL had exceeded its statutory authority under the FLSA. The court found that pushing the salary threshold so high effectively replaced the FLSA's duties-based test with a salary-only standard, something Congress never authorized. The decision drew on the Supreme Court's June 2024 ruling in Loper Bright Enterprises v. Raimondo, which overturned four decades of Chevron deference and directed federal courts to exercise independent judgment when evaluating whether agencies have acted within their statutory authority, rather than deferring to agencies' own interpretations of the law.

With the appeal effectively abandoned under the current administration, the DOL's technical amendment this week formalizes what has been the operational reality since late 2024: the 2019 thresholds govern, and new rulemaking does not appear imminent.

Key Points

• The DOL's technical amendment, effective immediately, removes the vacated 2024 overtime rule from the Code of Federal Regulations and reinstates the 2019 salary thresholds of $684 per week ($35,568 annually) and $107,432 per year for highly compensated employees.
• The 2024 rule, had it stood, was projected to make approximately 4.3 million additional workers eligible for overtime pay and direct roughly $1.5 billion per year in additional wages to employees.
• A federal court in Texas struck down the 2024 rule in November 2024, finding that the DOL overstepped its authority by effectively replacing the FLSA's job-duties test with a salary-level-only standard.
• The $684-per-week federal threshold has not been adjusted since it was set in 2019, meaning its real purchasing power has eroded as wages and prices have risen.
• At least six states, including California, New York, and Colorado, maintain overtime exemption thresholds above the federal floor; workers in those states retain stronger protections regardless of federal action.
• Employers who raised salaries or reclassified employees in anticipation of the 2024 rule are not legally required to reverse those changes, though employment attorneys generally advise caution given potential morale and retention consequences.

The Case for Workers: What Is Lost at the Paycheck

Supporters of the higher thresholds argue that the $684-per-week floor is out of step with the modern labor market. When it was established in 2019, it represented a meaningful update from the prior $455-per-week standard. But wages and prices have risen substantially since then, and the federal threshold has not moved. In practical terms, an employer can require a salaried employee earning just over $35,568 a year to work well beyond 40 hours a week without paying a dollar in overtime, a burden that falls disproportionately on lower-income professionals in sectors such as retail management, food service administration, and social services.

The Economic Policy Institute, which supported the 2024 rule, contended that the projected $1.5 billion annual increase in worker compensation was modest in the context of the broader economy, representing less than one-tenth of one percent of total wages and salaries nationwide. Proponents also argue that overtime pay does not merely compensate workers for extra hours. It creates a financial incentive for employers to limit excessive scheduling, structurally reducing overwork in industries where long hours have become routine without additional compensation.

The Case Against: Costs, Compliance, and the Limits of Agency Authority

Opponents of the 2024 rule, including the National Federation of Independent Business, argued that the proposed increases were too steep and implemented too rapidly, placing an undue compliance burden on small businesses that lack in-house legal or human resources staff. The NFIB's Small Business Legal Center contended that many employers were already compensating workers as competitively as their margins allowed, and that a mandatory reclassification exercise, requiring review of every salaried role against new thresholds, imposed real administrative costs with limited flexibility to absorb them.

The legal challenge that ultimately succeeded also raised a structural concern. The court found that the 2024 rule's automatic triennial increases would allow the DOL to raise the salary threshold on a fixed schedule without completing the notice-and-comment rulemaking process required under the Administrative Procedure Act, effectively bypassing the standard mechanism for public input on federal regulations. On the economic merits, some analysts have argued that mandatory overtime requirements can prompt employers to cap hours, restructure base compensation to offset added costs, or shift toward part-time and contract arrangements, outcomes that may not consistently benefit the workers the rule was intended to protect.

What Comes Next

The current administration has given no indication that it intends to pursue new overtime rulemaking. For the foreseeable future, the $684 weekly threshold stands as the federal floor. Workers in states with stronger protections will continue to benefit from those higher standards, but salaried employees in most states who earn between the 2019 and 2024 thresholds will have no federal overtime entitlement. Whether Congress moves to address the issue through legislation, or a future administration attempts new rulemaking designed to withstand judicial scrutiny under the post-Loper Bright framework, remains to be seen.

Primary Source Author: Wage and Hour Division Administrator Andrew Rogers
Primary Source: U.S. Department of Labor News Release, WHD, May 14, 2026
Primary Source Link: https://www.dol.gov/newsroom/releases/whd/whd20260514

Supplemental References

• DOL Earnings Thresholds for EAP Exemption, Current Standards
• Federal Court Vacates DOL Overtime Rule, Holland & Knight
• SBA Office of Advocacy, Court Strikes Down Overtime Rule
• Small Business Owners React to Overtime Rule Vacatur, AP via U.S. News
• New Overtime Rule Hurts Small Businesses, NFIB
• Explaining the DOL Overtime Rule, Economic Policy Institute
• Texas v. DOL Analysis, Epstein Becker Green