The U.S. Department of Labor (DOL) has formally rescinded the 2024 federal overtime rule. In a final rule published May 15, 2026, the DOL removed the 2024 changes from the federal overtime regulations and restored the prior exemption standards established under the 2019 rule. The recission is a technical correction accounting for changes in the law that have already occurred.  

The 2024 rule was intended to increase minimum salary thresholds needed for certain employees to qualify for overtime exemptions. Increases were to be rolled out in two phases, with the first increase occurring July 1, 2024, and a second on January 1, 2025. However, in late November 2024, after numerous lawsuits challenged the rule, a federal district court judge in Texas held that the DOL had exceeded its authority in issuing the rule, resulting in the rule being vacated nationwide. 

What Does it Mean? 

With the DOL’s latest action, the federal overtime exemption standards formally revert to the 2019 rule.  

Employers evaluating exempt classifications under federal law should continue using: 

• The standard salary threshold of $684 per week ($35,568 annually); and 

• The highly compensated employee threshold of $107,432 annually. 

Employers that delayed planned salary increases tied to the 2024 rule will no longer need to implement those increases under federal law. However, employers should continue reviewing employee classifications to ensure employees satisfy both the salary basis test and the applicable duties tests under the FLSA. 

California employers are reminded that, although the DOL’s action affects federal overtime exemption standards under the FLSA, California wage and hour laws continue to apply and impose their own exempt salary thresholds and overtime requirements. Because California’s exemption standards are generally more stringent than federal law, the withdrawal of the federal rule does not change employers’ obligations under California law.