Overtime Rule Reversal: Salary Threshold Returns to $35,568

The U.S. Department of Labor (DOL) has officially rescinded the 2024 overtime rule that sought to expand overtime eligibility for salaried employees by significantly increasing the salary threshold for white-collar exemptions under the Fair Labor Standards Act (FLSA).

As a result, employers should be aware that the overtime salary threshold established during the first Trump Administration is once again the governing standard.

What Changed?

The 2024 rule would have increased the minimum salary required for employees to qualify for the executive, administrative, and professional (EAP) exemptions from overtime requirements. The rule was intended to expand overtime eligibility to millions of additional workers.

With the rule now rescinded, the DOL is reinstating the previous salary threshold of:

• $684 per week
• $35,568 annually

Employees must generally meet both the salary threshold and applicable duties tests to qualify for exemption from overtime requirements.

What This Means for Employers

For many employers, this change provides relief from the higher labor costs that would have resulted from the increased salary thresholds.

Businesses that made compensation adjustments or reclassified employees in anticipation of the 2024 rule may want to review those decisions and determine whether any changes are appropriate moving forward.

Key considerations include:

• Reviewing exempt employee classifications
• Confirming employees still satisfy the applicable duties tests
• Evaluating compensation structures and payroll budgets
• Monitoring future developments from the Department of Labor

Important Reminder

The salary threshold is only one component of the overtime exemption rules. Employees must also satisfy the applicable job duties requirements to qualify as exempt from overtime under federal law.

Looking Ahead

Overtime regulations have changed several times over the past decade and may continue to evolve under future administrations. Employers should stay informed and periodically review employee classifications to ensure ongoing compliance.

If you have questions about how this change may affect your workforce, our team is available to help review your payroll and employee classifications.

Source: U.S. Department of Labor guidance and analysis of the DOL's rescission of the 2024 overtime rule, including commentary from Foley Hoag LLP.