Key Takeaways:
- The DOL has officially rolled back the 2024 salary-threshold increases for exempt EAP and highly compensated employees.
- The salary thresholds now revert to the pre-2024 levels: $684 per week for EAP employees and $107,432 annually for highly compensated employees.
- The amendment removes uncertainty for employers, but proper exempt classification still requires meeting both the salary threshold and duties test.
On May 14, 2026, the U.S Department of Labor’s (“DOL”) Wage and Hour Division announced a technical amendment rescinding increases to the salary-basis test for exempt executive, administrative and professional employees (“EAP”) as well as to the annual compensation threshold for certain highly-compensated employees, that the DOL previously implemented by final rule in 2024 (“2024 Rule”). This technical amendment restores the salary thresholds as they existed prior to the DOL’s 2024 Rule, which are $684 per week for EAP employees and $107,432 for highly-compensated employees.
The DOL’s technical amendment resolves the uncertainty regarding the viability of the DOL’s controversial 2024 Rule.
Background
Generally, employers must pay employees overtime (1.5 times their regular rate) for all hours worked over forty (40) in a workweek. The Fair Labor Standards Act allows employers to classify certain employees as exempt from the overtime requirements of the act. To be classified as exempt, employees must meet the duties test of the relevant exemption and be paid at, or above, the minimum salary threshold.
The DOL’s technical amendment concerns the second of these issues, i.e., the salary threshold. Beginning in 2019, employers could only classify employees as exempt pursuant to the EAP exemptions if they were paid at least $684 per week and could only utilize the highly-compensated exemption for employees who earned at least $107,432 annually.
In April 2024, the DOL issued a final rule increasing these salary thresholds. The DOL’s 2024 Rule increased the salary basis threshold for the EAP exemptions to $844 per week starting on July 1, 2024 and to $1,128 per week starting January 1, 2025. The 2024 Rule further increased the minimum annual salary threshold for the highly compensated exemption to $132,964 per year, effective July 1, 2024, and to $151,164 per year, effective January 1, 2025.
The DOL’s 2024 Rule was the subject of multiple legal challenges. In late 2024, two federal district courts in Texas entered orders vacating the 2024 Rule, leaving the salary threshold in a state of limbo. For more than a year, the Code of Federal Regulations listed the higher salary thresholds in the 2024 Rule, even though federal courts had vacated the rule and the DOL had publicly stated it would not enforce it.
The DOL Vacates the Salary-Threshold Increases Implemented by the 2024 Rule
On May 14, 2026, the DOL officially announced a technical amendment vacating the salary threshold increases for the EAP and highly-compensated exemptions implemented by the 2024 Rule. The DOL explained that it made this technical amendment to “implement” the “judicial decisions” vacating the 2024 Rule. The DOL elaborated that the salary thresholds for the EAP and highly-compensated exemptions would revert to “as [they] appeared in the [Code of Federal Regulations] immediately prior to the effective date of the 2024 rule.”
Accordingly, as of May 15, 2026, the EAP exemptions are once again officially subject to a salary-basis threshold of $684 per week, and the highly-compensated exemption is subject to an annual salary threshold of $107,432.
To Summarize
The DOL’s technical amendment is good news for employers, by resolving the uncertainty regarding the viability of the DOL’s controversial 2024 final rule, and – by keeping the salary thresholds at the prior, lower level – increases the number of employees who may be classified as exempt.
It is crucial that employers properly classify their exempt employees, which includes compliance with both the relevant salary threshold as well as the duties test for each exemption. Misclassification lawsuits can be burdensome and expensive. If you have any questions about employee classification, please reach out to your Dinsmore & Shohl attorney.