US Department of Labor Officially Rescinds 2024 Biden-Era Overtime Rule
On May 14, 2026, the Department of Labor (DOL) formally rescinded the 2024 overtime rule and reinstated the regulatory framework that existed previously. This rescission is likely the final nail in the coffin for the 2024 rule that created significant issues for employers.
The 2024 Overtime Rule
As we covered previously, the DOL’s 2024 rule sought to significantly expand overtime eligibility by increasing the minimum salary threshold for executive, administrative, and professional exemptions in two stages: 1) July 1, 2024: Increase from $35,568 to $43,888 annually and 2) January 1, 2025: Increase from $43,888 to $58,656 annually.
The 2024 rule also increased the threshold for the highly compensated employee (HCE) exemption. Many employers were forced to increase the salaries for their exempt employees on July 1, 2024. But before the second increase could take effect, a Texas Federal Court vacated the rule in late 2024.
The DOL’s 2026 Rescission
Following the decision of the Texas District Court, the 2024 rule was effectively unenforceable. The District Court’s decision was appealed, but the Fifth Circuit Court of Appeals dismissed the appeal May 5, 2026. Given the conclusion of the appeal, the DOL took the final step of issuing a “technical amendment” that revoked the 2024 rule from the Code of Federal Regulations. This technical amendment also officially restored the 2019 rule.
Practical Implications for Employers
As a result of the rescission, the annual salary threshold for the standard exemptions and the HCE exemption are $35,568 ($684 per week) and $107,432 ($2,066 per week) respectively. For most employers, the rescission does not materially change current compliance obligations, as the 2019 thresholds have been applied in practice since the Texas Federal Court vacated the 2024 rule. While the DOL could engage rulemaking in the future, it is unlikely the current administration will make any rule to further revise the overtime salary thresholds.
However, the federal rollback does not affect state law thresholds for overtime exemptions, which may exceed federal requirements (e.g., California, New York). Nor does the recission alter an employer’s obligations for other federal or state wage and hour issues (e.g., minimum wage, employee v. independent contractor classification, regular rate calculations, etc.).
If you have any questions about compliance with federal or state wage and hour law, contact the authors or your Butzel attorney. Butzel’s Labor & Employment team is ready to assist with all of your compliance needs.
Brett J. Miller
313.225.5316
millerbr@butzel.com
Blake Padget
248.258.1305
padget@butzel.com
