On May 14, 2026, the U.S. Department of Labor (DOL) announced that it is formally rescinding the 2024 overtime rule that would have made potentially millions more white-collar workers eligible for overtime premium pay under the Fair Labor Standards Act (FLSA).
Quick Hits
- On May 14, 2026, the DOL announced that it is formally rescinding the Biden administration’s 2024 overtime rule, which was set to increase the white-collar exemption salary threshold to $1,128 per week, and the threshold for the highly compensated employee exemption to $151,164 per year, as of January 1, 2025.
- The rescission follows two federal court rulings in Texas that vacated the 2024 rule, with the Fifth Circuit dismissing the final appeal on May 5, 2026.
- For now, the executive, administrative, and professional exemption threshold remains $684 per week, and the highly compensated employee limit remains $107,432 annually, in accordance with the DOL’s 2019 rule.
- The rescission takes effect on May 15, 2026.
The DOL Wage and Hour Division unveiled a final rule to rescind the regulatory effects of the overtime rule, which would have raised the minimum salary for white-collar workers to be exempt from overtime pay, and restores the federal white-collar exemption thresholds established under a 2019 DOL rule.
The final rule, scheduled for publication in the Federal Register on May 15, 2026, essentially reverses the overtime expansion that would have occurred under the 2024 rule issued by the Biden administration.
The rescission follows the 2024 rule’s being vacated by two federal courts in Texas. On May 5, 2026, the U.S. Court of Appeals for the Fifth Circuit dismissed appeals after the Trump administration stopped defending the 2024 rule in court.
New Final Overtime Rule
In practical terms, the new rule restores the salary threshold for the FLSA overtime exemption for executive, administrative, and professional (EAP) employees to $684 per week and restores the “highly compensated employee” (HCE) exemption threshold to $107,432 in total annual compensation, including at least $684 per week paid on a salary or fee basis.
The April 2024 DOL final rule would have raised the minimum salary for EAP employees to $1,128 per week, the equivalent of a $58,656 annual salary, and the minimum salary for the HCE exemption to $151,164 per year, as of January 1, 2025. These increases would have made potentially millions more white-collar workers eligible for overtime. The rule would have further required automatic updates to those thresholds every three years based on up-to-date wage data.
Legal Battles
In November 2024, the U.S. District Court for the Eastern District of Texas, in Texas v. Department of Labor, vacated the DOL’s 2024 rule on a nationwide basis, finding the rule exceeded the agency’s statutory authority. The Biden DOL had appealed that ruling to the Fifth Circuit.
Then, in December 2024, the Eastern District of Texas issued a summary judgment ruling in a separate case, Flint Avenue LLC v. Department of Labor, again invalidating the overtime rule. The Trump DOL appealed that ruling in February 2025, then later moved to withdraw both appeals, citing plans to revisit the rule. The Fifth Circuit then formally dismissed the final appeal on May 5, 2026, without issuing a merits ruling or sustaining or reversing the 2024 rule.
Separately, in September 2024, during the litigation over the 2024 rule, the Fifth Circuit affirmed the 2019 rule. The Fifth Circuit ruled in that case that the DOL has the authority to set minimum salary requirements for the EAP exemption as part of its “explicitly delegated authority to define and delimit the terms of the Exemption.”
Next Steps
The rescission of the 2024 overtime rule is unsurprising given that the Trump administration had signaled that it would revisit the rule. However, the administration is foregoing the process, at least for now, for revising exemption thresholds and instead restoring them to the levels in the 2019 rule. Notably, this removes the 2024 rule’s automatic triennial threshold adjustments.
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