On May 15, 2026, the U.S. Department of Labor issued a final rule that immediately reinstates the minimum salary thresholds for exempt employees to the levels established in 2019 during the first Trump administration. This action explicitly rescinds the 2024 final rule that sought to raise the minimum salary levels in July 2024 and January 2025 (as reported in Lake Effect’s June 27, 2024, June 2, 2024, and April 24, 2024 blogs).
Under the new final rule, exempt employees must be paid on a salary basis, earn a minimum of $684 per week, equivalent to $35,565 annually, and perform duties that meet the specific requirements of the executive, professional or administrative white-collar exemptions. Highly compensated employees who earn at least $107,432 per year are exempt under a more relaxed duties test, if they regularly perform any exempt white-collar duties.
The Biden-era 2024 final rule sought to raise the salary threshold by 2021 to $1,128 per week or $58,656 annually for exempt employees, and $151,164 annually for highly compensated employees. That rule was challenged in federal court and vacated in November 2024. In publishing the new final rule, the DOL skipped the usual public notice and comment period and made the rule effective immediately, explaining that this final rule merely gives effect to the court’s prior ruling vacating the 2024 rule and updates the CFR to reflect the current status quo and existing practice for employers.
Even though the new final rule codifies existing practice, employers should take the opportunity to review their pay practices and confirm that jobs are classified correctly as exempt or non-exempt from FLSA overtime pay requirements. This review should consider all three tests: the salary basis test, the minimum salary of $684 per seek or $35,565 annually, and the applicable duties test for the role. Employees paid on a salary basis and earning at least $107,432 should regularly perform at least one of the stated exempt duties.
The attorneys and HR professionals at Lake Effect can provide guidance on employment-related agency and legislative actions, employment laws, regulations, and agency guidelines. We continue to monitor important legal and HR developments, as well as other information that could impact the workplace. Please watch our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.
