The potential for significant changes in workplace policy in this nation is almost subtle. The U.S. Department of Labor released a “technical amendment” in the Federal Register on May 15, 2026. No lengthy rollout, no press conference. The salary threshold for overtime exemption dropped from where the Biden administration had attempted to place it back down to $684 per week, or $35,568 annually, with just a subtle change to the Code of Federal Regulations.
It wasn’t totally shocking to anyone who had been paying close attention to this. The 2024 Biden-era rule had already been overturned by two federal district courts in Texas, and in early May 2026, the Fifth Circuit dismissed related appeals. In essence, what the courts had already decided was being formalized by the DOL. However, witnessing it actually occur in a single published notice with immediate effect served as a reminder of how quickly the ground beneath employees’ feet can change.
The 2024 rule had been truly ambitious. Starting on July 1, 2024, the Biden DOL increased the standard salary threshold to $43,888 per year; a second increase to $58,656 is scheduled for January 1, 2025. The concept was simple: more salaried employees making less than those thresholds would be eligible for overtime compensation, which would either force employers to raise wages above the threshold or reclassify impacted workers as non-exempt. It was the kind of rule that, while it may seem like a raise in theory, it actually has very different effects depending on the industry, the location, and the size of the employer.
In the end, the rule never really caught on. The courts acted swiftly, and the operative standard is now $684 per week, as it was under the 2019 rule. Additionally, the highly compensated employee threshold has returned to $107,432 after briefly rising to $151,164 under the 2024 rule. While that figure is still not insignificant, employers who have been discreetly modifying their compensation plans for the previous two years in anticipation of higher thresholds will have to do a completely different calculation.
It’s worthwhile to consider the practical implications of that. Under the current threshold, a salaried manager making $45,000 annually who would have been eligible for overtime under the Biden rule is once again considered exempt, provided that their duties satisfy the standard tests. According to DOL regulations, exempt executive employees must regularly oversee at least two full-time employees, manage the business primarily, and have actual hiring and firing authority. The tests are still the same. However, the numbers have subtly changed for employees who had begun to anticipate being eligible for overtime.
By claiming that a delayed rollout could mislead employees and employers consulting the CFR to understand their legal rights, the DOL defended the immediate effective date. On its face, that argument makes sense: why maintain erroneous regulatory language for longer than is necessary? However, it appears that the agency was also drawing a clear line prior to the June 30 deadline it set for itself to decide how to move forward with overtime rulemaking. At least for the time being, publishing this amendment before that date indicates that the internal dispute has been resolved.
Whether this is the end of the story is still genuinely unknown. Advocacy groups may contest even this technical amendment on procedural grounds, and the DOL hasn’t officially prohibited future rulemaking on overtime thresholds. In order to avoid the customary notice-and-comment procedure, the agency used the Administrative Procedure Act’s good-cause exception. This was a reasonable decision given the existing court orders, but it was not a firm one.
The immediate task for payroll departments and HR teams is simple: confirm which employees are exempt under the $684 threshold and make sure the duties tests are being met, not just presumed. Hastily created classifications seldom hold up well when examined closely. The underlying obligations have not changed, even though the threshold has decreased.
