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DOL Restores Overtime Salary Threshold to $684 in Final Rule Update

Carol Warner
By: Carol Warner
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About the Author

For nearly two decades, Carol Warner has analyzed the legal and financial realities behind workplace decisions, covering employment law, benefits, payroll and HR technology. She translates complex legal updates, regulatory shifts and vendor claims into plain language that HR teams can act on. Her focus is simple: What does this mean for employers, and what should they do next? Connect with her on LinkedIn.

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Last Updated: May 18, 2026
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The Department of Labor (DOL) has finalized a technical amendment restoring the 2019 overtime salary threshold to the Code of Federal Regulations (CFR) following two federal court decisions that invalidated the 2024 rule.

For HR and payroll teams, the amendment closes the loop on the litigation and confirms which federal salary thresholds govern exempt classifications. 

How the Threshold Changed

Under the Fair Labor Standards Act (FLSA), workers must meet three tests to qualify as exempt from overtime: a duties test, a salary basis test and a salary level test. 

“It is critical that each element of the section 13(a)(1) exemptions – duties, salary basis, and salary level requirements – be clearly framed for the benefit of both employees and employers,” said WHD Administrator Andrew Rogers.

In 2019, the DOL raised the overtime salary threshold from $455 to $684 per week ($35,568 annually). 

That level held until July 2024, when the Biden administration’s rule took effect, raising the threshold to $844 per week – with a second increase to $1,128 per week ($58,656 annually) scheduled to take effect in January 2025.

But employers never had to comply with that second increase. In November 2024, a federal judge in the Eastern District of Texas vacated the Biden-era rule, and a month later, a judge in the Northern District of Texas similarly vacated it.

The WHD immediately returned to enforcing the 2019 thresholds. After ending its defense of the appeal, the DOL took steps to formally remove the vacated rule’s text from the CFR and restore the 2019 language. 

The agency skipped the standard notice-and-comment process, citing good cause – the courts had already resolved the issue, and leaving the vacated rule in the CFR risked confusing employers and employees about their rights and obligations.

Where Overtime Salary Thresholds Stand Now

The restored overtime salary thresholds are:

  • Standard salary level: $684 per week ($35,568 annually)
  • Highly compensated employees (HCEs): $107,432 annually, with at least $684 per week paid on a salary basis
  • Territories: $455 per week in Guam, Puerto Rico, the U.S. Virgin Islands, and the Northern Mariana Islands; $380 per week in American Samoa

What HR and Payroll Teams Should Do

If your organization made changes in response to the 2024 rule, these steps can help you make sure those decisions still hold up.

Confirm state salary thresholds first. The $684 weekly threshold is the federal floor – and in many states, it’s not the number that matters. For example, California, New York, Washington, and others set higher thresholds that control where they apply. Know which number governs your workforce before making classification or pay changes.

Audit exempt classifications with care. Employees reclassified as non-exempt under the 2024 rule may meet the salary threshold again – but clearing the threshold is only the beginning. The duties test must be revalidated, not assumed. Repeated reclassification changes without strong, contemporaneous documentation can increase misclassification risk and complicate defense efforts in wage and hour disputes.

Review HCE classifications – including the payroll details. The HCE threshold returns to $107,432. For employees near that line, both compensation and duties need a fresh look. Payroll teams should also check whether any mid-year transitions create proration or bonus inclusion issues under the HCE test – those calculations are a common source of error.

Think hard before cutting salaries. Salary increases under the 2024 rule can legally come back down, but this is where compliance and employee relations collide. Reductions must be prospective and structured to preserve the salary basis test, and they can invite additional scrutiny in wage and hour investigations. More practically, employees who received raises under the 2024 rule didn’t see them as temporary. Pulling that pay back without a thoughtful communication strategy risks more than morale; it can accelerate turnover and increase the likelihood of wage complaints from employees who felt the raise was earned. 

Update policies, job descriptions and supporting documentation. Classification criteria or job descriptions revised under the 2024 rule should reflect where the law landed, not where it was briefly headed.

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