The U.S. Department of Labor has formally reinstated the 2019 regulatory framework governing the Fair Labor Standards Act's white-collar overtime exemptions. Effective May 15, 2026, the Wage and Hour Division issued a final rule amending 29 C.F.R. Part 541 to restore the text of the 2019 final rule, closing a period of significant uncertainty for employers navigating the FLSA's exemption requirements.
The technical correction follows federal court judgments that vacated the DOL's 2024 final rule, which had sought to raise the salary thresholds applicable to the executive, administrative, professional, outside sales, and computer employee exemptions. With those judgments now implemented through formal rulemaking, the regulatory text once again reflects the salary level and highly compensated employee thresholds established under the 2019 rule. Employers may rely on those prior thresholds as the operative standard going forward.
The practical implications are immediate. Many employers reclassified positions, raised salaries, or restructured pay practices in anticipation of the now-defunct 2024 increases. Those decisions should be revisited in light of the reinstated framework. While the 2019 thresholds set the regulatory floor, employers retain discretion to maintain higher salaries or broader exempt classifications where consistent with business needs, retention goals, or other legal obligations. Any rollback of compensation or reclassification of employees from exempt to non-exempt status, however, warrants careful consideration of employee relations concerns, contractual commitments, and applicable state wage-and-hour laws, several of which impose more demanding standards than federal law.
Employers should also confirm that their exemption analyses continue to satisfy the duties tests, which remain unchanged. Salary level is only one component of the exemption inquiry, and misclassification risk persists where job duties do not align with the regulatory criteria for executive, administrative, professional, outside sales, or computer employee status. A documented review of current classifications, salary levels, and payroll practices is advisable to ensure alignment with the reinstated federal standard and any overlapping state requirements.
This article is provided for general informational purposes only and does not constitute legal advice. Employers should consult qualified counsel for guidance tailored to their specific circumstances and jurisdictions.