The 2024 Overtime Rule Is Officially Gone. Here's What's In Effect Today.

The 2024 overtime rule is officially gone. Here's what's in effect today.

On May 15, the Department of Labor formally rescinded the rule that would have raised the federal salary threshold to $58,656. Practically? Not much changed — that rule was struck down in Texas back in November 2024 and hasn't been enforced since. But the paperwork finally caught up, and there's nuance your team should know.

Effective May 15, 2026 Applies to All employers covered by FLSA Action level Verify, don't panic

If you're the only HR person at your company, you've probably been ignoring this story for a year and a half — and honestly, you were right to. Let's catch you up in five minutes.

The short version

In April 2024, the Biden-era DOL announced a rule that would have raised the salary threshold for exempt employees from $35,568 to roughly $58,656, with another bump planned for January 2025. That rule was set to change a lot of payroll math at small and mid-size companies.

Then in November 2024, a federal court in Texas vacated the rule nationwide. Since then, the $35,568 threshold has remained in effect — but technically, the 2024 rule still existed on paper. On May 15, 2026, the DOL finally removed it for good.

So nothing in your day-to-day enforcement landscape changed this week. What changed is that there's now zero regulatory ambiguity. The numbers in effect today are the same numbers that have been in effect since 2019.

! Your state may require more

The federal threshold is a floor, not a ceiling. If you operate in any of these states, your state threshold is higher and the federal change does not lower it:

California: $68,640/year (most employers)
New York: $62,400/year (NYC, Long Island, Westchester)
Washington: $69,305/year (small employers) / $77,968 (large)
Colorado & Alaska: Above federal threshold

What you should actually do this week

Check your state file. If you operate in California, New York, Washington, Colorado, or Alaska, your real threshold is your state's — not the federal one. Don't accidentally drop a salary based on the federal number.
Audit anyone you reclassified during the brief window. If you reclassified employees as non-exempt between April 23 and November 15, 2024 (the window when the 2024 rule was technically law), verify those classifications still make sense for the role.
Update your handbook references. If your handbook quotes the 2024 thresholds anywhere — $844/week or $58,656/year — replace them with the current numbers. We can help with that.
Don't make this a big internal announcement. For most employees, nothing changed. Sending a "BIG UPDATE FROM HR" email will create confusion where none needs to exist.

What's still in the pipeline

Two more federal rules are wading through the rulemaking process. Neither is law yet, but both will matter when finalized:

Watch list

Proposed

Joint Employer Rule

Comments close around June 22, 2026. Would change risk exposure for any company using staffing firms, franchises, or subcontractors. Largely restores the 2020 framework with a four-factor test.

Pending

Independent Contractor Rule

Comment period closed April 28, 2026. Final rule expected later this year. Will rescind the 2024 classification rule under FLSA. Important: Won't change state tests like California's ABC test, or IRS classification.

Why we wrote this

This is the kind of update that ends up as a 47-page PDF on an employment law firm's website, or a 4-line summary in your SHRM newsletter. Neither one tells you what to actually do with the information at 7am on a Tuesday when you're the only HR person at the company.

HR Compliance Compass is built for that moment. It's plain-English federal and state employment law guidance, organized around how HR people actually think — not how attorneys want to bill. If this kind of writing is useful to you, our app does it for every state, every topic, every day.

You shouldn't have to Google employment law at 7am on a Tuesday.

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Common questions

Does this mean we should lower exempt employee salaries?

No. The federal change just confirms what's already been in effect since November 2024. If you've been paying exempt employees at or above $35,568, you're fine. If you're in a state with a higher threshold (California, New York, etc.), your state number is what governs.

We reclassified some employees as non-exempt last year. Should we reclassify them back?

It depends on whether their job duties meet the exemption test and whether their salary still does. Salary alone doesn't make someone exempt — they also have to perform exempt duties. Audit the classification on its merits, not just on the salary threshold change.

What about the Joint Employer rule? Does it apply to us yet?

No. It's a proposed rule in the comment period. The DOL has to publish a final rule before it has legal effect, and that's still months away. Watch the space, but don't change anything yet.

How does the Independent Contractor rule affect our 1099 workers?

When the final rule lands, it will change how the DOL evaluates classification under the FLSA. It won't change the IRS's classification test or state-level tests like California's ABC test, both of which are usually stricter. If you're in California, the federal rule has very limited practical effect for you.

Is this legal advice?

No. This is plain-English compliance information based on official DOL guidance and the Federal Register. For specific situations — especially anything involving termination, classification disputes, or potential litigation — talk to an employment attorney.