The DOL Restored Salary Levels for FLSA White Collar Exemptions: What Employers Need to Know

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Patricia Tsipras

May 26, 2026

The Fair Labor Standards Act (FLSA) has long provided exemptions from minimum wage and overtime pay requirements for employees in bona fide executive, administrative, and professional (EAP) roles, commonly referred to as the “white collar” exemptions.  However, the criteria for these exemptions, particularly the salary threshold, have been the subject of significant regulatory and judicial activity in recent years.  Most recently, the U.S. Department of Labor (DOL) announced the restoration of the salary levels for these exemptions, reverting to the pre-2024 thresholds.  This article provides an overview of the current state of the law and practical guidance for employers navigating these changes.

Background: The 2024 Rule and Its Legal Challenges

In 2024, the DOL issued a Final Rule that sought to increase the minimum salary threshold for the white collar exemptions in two phases: from $684 per week ($35,568 annually) to $844 per week ($43,888 annually) on July 1, 2024, and then to $1,128 per week ($58,656 annually) on January 1, 2025.  The rule also introduced automatic updates to the salary threshold every three years starting in 2027.

However, the 2024 Rule faced immediate legal challenges.  Federal courts, including the Eastern District of Texas, struck down the rule, holding that it improperly prioritized salary levels over the duties test, which is the cornerstone of the FLSA’s white collar exemptions.  The courts emphasized that the FLSA requires an employee’s exempt status to be determined primarily by their job duties, not their salary alone.  As a result, the rule was vacated on a nationwide basis, and the DOL was prohibited from enforcing the increased salary thresholds.

The Current State of the Law: Restoration of Pre-2024 Salary Levels

On May 14, 2026, the DOL formally rescinded the 2024 Rule, restoring the salary threshold for the white collar exemptions to $684 per week ($35,568 annually).  The threshold for highly compensated employees (HCEs) also remains at $107,432 annually.  This decision aligns with the courts’ rulings and ensures that the duties test remains the primary determinant of exemption status.

Key Considerations for Employers

1. Understand the Current Salary Thresholds
   Employers should note that the salary threshold for the white collar exemptions is now firmly set at $684 per week.  For HCEs, the threshold remains $107,432 annually.  These levels are consistent with the DOL’s pre-2024 regulations and provide clarity for employers moving forward.
2. Focus on the Duties Test
   The duties test remains the critical factor in determining whether an employee qualifies for a white collar exemption.  Employers must ensure that exempt employees meet the specific job duties outlined in the FLSA regulations for executive, administrative, or professional roles.  Payment on a salary basis alone does not make an employee exempt.
3. Review Employee Classifications
   Employers should take this opportunity to review their employee classifications to ensure compliance with the restored salary thresholds and the duties test.  Misclassification can result in significant liability, including back pay for unpaid overtime and penalties.
4. Prepare for Potential Future Changes
   While the 2024 Rule has been rescinded, regulatory changes to the FLSA’s white collar exemptions remain a possibility under future administrations.  Employers should stay informed about developments in this area and be prepared to adjust their practices as needed.
5. Communicate with Employees
   Changes to exemption status can impact employee morale and expectations.  Employers should communicate clearly with employees about their classification and any changes to their pay or overtime eligibility.

Looking Ahead

The restoration of the pre-2024 salary levels for the FLSA white collar exemptions provides much-needed stability for employers.  By focusing on compliance with the duties test and the current salary thresholds, employers can minimize legal risks and ensure fair treatment of their workforce.

This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice.  Always consult an attorney with specific legal issues.