The Overtime Salary Line Just Snapped Back to Where It Was
A rule raised the pay floor for exempt employees, a court vacated it, and the floor just returned to its old level. What actually changed, and what did not.
For a while, the paperwork said one thing and the courts said another. A federal rule raised the minimum salary an employee needed to earn before an employer could call them exempt from overtime — and then a court threw that rule out, which means the number employers actually have to use today is not the one from that brief window. It is an older, lower one.
The rule that got thrown out would have pushed the standard salary threshold up in stages, with a bigger jump still to come. It never got there. That rule was vacated by the U.S. District Court for the Eastern District of Texas in November 2024. Rather than keep fighting for it in the middle of a change in administration, the Department of Labor let the appeal drop. On May 14, 2026, the Wage and Hour Division published a technical amendment formally abandoning the 2024 numbers and restoring the ones that came before them.
The number that actually governs today
The restored standard salary level is $35,568 a year, or $684 a week — the same figure that applied before the 2024 rule ever took effect, now made official again rather than just tolerated because a court order happened to be in effect. A separate, higher threshold applies to the so-called highly compensated employee exemption, a narrower category with a lighter duties test; that figure is restored to $107,432 a year. Employers who spent the transition period quietly raising salaries to stay ahead of the rule that was coming are not required to walk those raises back, but they are no longer required to keep pushing salaries upward to meet a target that no longer exists.
None of this changed how the Wage and Hour Division actually behaved in the meantime. The agency had already been enforcing the older, lower thresholds since the vacatur, so for most employers this technical amendment is a formality confirming what compliance already looked like, not a fresh instruction to change anything. The value of the amendment is certainty: a number that used to rest on a single district court's order now rests on the regulation itself.
The back-and-forth also exposed a specific kind of software risk. Payroll and HR platforms that hard-coded the earlier, higher thresholds into automated exemption flags did not revert on their own when the rule was vacated; someone had to go in and change the configuration, and not every company did. A vendor's default settings are not a substitute for someone on the compliance team actually confirming which number is live in the system right now, especially after a stretch when the correct answer changed direction more than once.
Salary alone was never the whole test
A dollar figure is the easiest part of exemption analysis to check, which is exactly why so many employers stop there. It is not sufficient on its own. To qualify for an exemption, an employee must meet specific duties tests and, in most cases, minimum compensation requirements — both halves have to hold at once. A person paid well above the salary line can still be misclassified as exempt if what they actually do all day looks more like ordinary hourly work than executive, administrative, or professional judgment. Passing the salary test and failing the duties test is still a violation, and it is one of the most common findings in a wage and hour audit precisely because payroll can verify a number in seconds and nobody double-checks the job description against it.
What the reset actually means for payroll
The practical task is smaller than the news cycle around it suggests. Employers should confirm which salary figure their payroll system is currently using, correct it if it is still pointed at the vacated numbers, and separately confirm that every employee classified as exempt still clears the duties test regardless of which salary line applies. States are free to set their own, sometimes higher, salary thresholds on top of the federal floor, so a multi-state employer cannot assume the federal restoration is the last word everywhere it operates. The federal number moved twice in two years. Treating it as settled, either way, is how the next audit finds a surprise. A short internal memo confirming the current figures, dated and filed, is usually enough to close the gap.