The Great Overtime Reset and the Erasure of the 2024 Salary Thresholds

The ambitious 2024 mandates that sought to push this floor to $844 per week last summer and an unprecedented $1,128 per week by the start of 2025 have been entirely erased from the federal books. Businesses are immediately freed from the mandate to either hike base pay for mid-level managers or reclassify them as hourly employees subject to strict timekeeping and time-and-a-half overtime premiums. However, this retroactive nullification creates a severe operational dilemma for companies that proactively complied with the July 2024 tier. Human resources departments are now forced to calculate whether to roll back the salaries of mid-level managers who received defensive raises last year, a move guaranteed to crush employee morale and accelerate turnover, or permanently absorb the bloated structural costs of a legally dead rule. The financial relief extends to the upper echelons of the workforce through the rollback of the Highly Compensated Employee exemption. The total annual compensation requirement for these top earners drops back down to $107,432, completely abandoning the 2024 rule's planned spikes to $132,964 and eventually $151,164. Perhaps the most significant structural defeat for the agency is the obliteration of the automatic triennial updates. The Department of Labor had sought to lock in an escalator clause that would automatically force these earnings thresholds higher every three years without the need for new rulemaking. Federal courts dismantled that mechanism, and this technical amendment officially scrubs it from the regulatory framework, ensuring any future threshold adjustments will require the full process of standard administrative rulemaking. The Department of Labor wielded the good cause exception to make this rollback effective immediately upon publication on May 15, 2026.