DOL Amendment Formally Restores 2019 Overtime Exemption Rules

The U.S. Department of Labor (DOL) has issued a technical amendment that formally restores the 2019 salary thresholds for the Fair Labor Standards Act’s (FLSA) white-collar exemptions, removing regulatory text from the agency’s 2024 overtime rule that was struck down by federal courts.

Announced May 14 by the DOL’s Wage and Hour Division (WHD), the amendment updates Part 541 of Title 29 of the Code of Federal Regulations, which governs the executive, administrative and professional (EAP) exemptions from federal minimum wage and overtime requirements. The amendment is effective immediately and does not alter the agency’s current enforcement approach. 

Under the restored regulations, most exempt employees must be paid on a salary basis of at least $684 per week, equivalent to $35,568 annually. The total annual compensation threshold for the highly compensated employee (HCE) exemption remains $107,432 per year, including at least $684 per week paid on a salary or fee basis. 

Formal Cleanup After 2024 Rule Vacated

In April 2024, the DOL published a final rule that significantly increased the salary thresholds for exempt employees. That rule raised the standard salary level to $844 per week beginning July 1, 2024, with a scheduled increase to $1,128 per week on Jan. 1, 2025. It also increased the HCE threshold to $151,164 annually.

Business groups challenged the rule, and in November 2024, the U.S. District Court for the Eastern District of Texas vacated it. Since then, the WHD has continued enforcing the salary levels established under the DOL’s 2019 rule.

The newly issued technical amendment does not create new obligations for employers. Instead, it removes the vacated 2024 regulatory language from the Code of Federal Regulations and republishes the operative 2019 text so the regulations accurately reflect the standards currently in effect. 

State Law Still Controls in Many Jurisdictions

Although the amendment clarifies federal law, employers must continue to account for more protective state requirements.

“Although the DOL’s amendment pertains to the FLSA’s salary requirements, employers should remain mindful of state law,” said Russell Bruch, an attorney with Morgan, Lewis & Bockius LLP in Washington, D.C. “Indeed, the DOL’s action has no effect on state law overtime exemptions, so employers will need to continue complying with all requirements under those laws, some of which have salary levels higher than the existing federal level (e.g., California, New York State, and Washington State) and/or different duties tests.”

In states such as California and Washington, exempt employees often must satisfy substantially higher salary thresholds than federal law requires. Employers must comply with whichever standard is more protective to employees.

HR Q&A: What is the difference between California overtime exemption requirements and federal overtime exemption requirements?

Compliance Work Not Over

The amendment provides welcome certainty after months of litigation and confusion, but HR professionals should not treat it as a reason to relax compliance efforts.

“For HR professionals, an important takeaway is that this development provides added clarity to the federal framework; it does not eliminate the need for careful exemption audits and ongoing compliance monitoring,” said Eric Kim, an attorney with Morgan, Lewis & Bockius LLP in Philadelphia. “Employers should continue evaluating classifications holistically, documenting exemption analyses, training managers on overtime compliance, and watching for additional federal or state developments in this area.”

Sample Form: FLSA Overtime Exemption Questionnaire

What HR Should Do Now

For employers already using the 2019 salary thresholds, no immediate payroll changes are required. However, this is a good opportunity to review exempt classifications to ensure employees satisfy all three components of the exemption analysis:

• The salary basis test.
• The salary level test.
• The duties test.

The DOL’s amendment closes the chapter on the invalidated 2024 rule and confirms that, for now, the familiar 2019 federal standards remain the governing framework for overtime exemption compliance.