Labor & Employment Law Daily Wrap Up, FEDERAL REGULATIONS—In ‘technical’ amendment and final nail in coffin, DOL turns back clock to 2019 version of FLSA’s EAP exemptions, (May 14, 2026)

By Brandi O. Brown, J.D.

Appeals pending with the Fifth Circuit relating to injunctions issued against the 2024 rule changes were recently dismissed on joint motion by the parties.

In a final rule and technical amendment being published in tomorrow’s Federal Register and effective immediately, the Wage and Hour Division of the Department of Labor has officially replaced the amendments made in 2024 to the regulations implementing FLSA exemptions with the language from 2019.

The 2024 final rule had revised regulations issued under the FLSA implementing the exemptions from minimum wage and overtime pay requirements for executive, administrative, professional, outside sales, and computer employees (the “EAP” exemption), potentially rendering millions of additional employees nonexempt, see 89 Fed. Reg. 32842 (Apr. 26, 2024) (codified at 29 C.F.R. §§ 541.0–541.710)).

Staged changes. The 2024 rule set forth three, staged changes to the EAP exemption, and each change increases the minimum salary level at which EAP employees may become exempt under the FLSA. First, the 2024 rule raised the minimum salary level from $684 per week to $844 per week starting on July 1, 2024. According to DOL, this change made about one million employees nonexempt who were previously exempt. Second, the 2024 rule was set to raise the salary level from $844 per week to $1,128 per week starting on January 1, 2025. DOL estimated that this change would render about three million additional employees nonexempt who were previously exempt. Third and finally, the 2024 rule set out a mechanism to automatically increase the salary level triennially based on contemporary earnings data. The first automatic change was scheduled to occur on July 1, 2027. DOL estimated that these automatic updates will result in millions more employees becoming nonexempt.

Legal challenges. However, in mid-November 2024, a federal district court in Texas issued a nationwide injunction against the rule, in one of several challenges made to the new rule. The decision, penned by Judge Sean D. Jordan, who was appointed by President-elect Trump during his first administration in January 2019, enjoined application of the 2024 DOL rule that had curtailed the EAP exemptions.

Applying both retrospectively and prospectively, the order prevented the rule’s future planned automatic increases in the applicable salary threshold.

Fifth Circuit dismissals. The technical amendment and final rule cited that decision, along with another decision by a Texas federal court the following month. More recently, the Fifth Circuit dismissed the appeals made in those cases, see Texas v. U.S. Dep’t of Lab. , No. 24-40777, Dkt. No. 82 (5th Cir. May 5, 2026) (order dismissing appeal) and Flint Ave., LLC v. U.S. Dep’t of Lab. , No. 25-10349, Dkt. No. 58 (5th Cir. May 7, 2026) (same), in both cases pursuant to joint motions of the parties.

“In light of these judgments,” tomorrow’s publication explains, “the operative version of the Department’s part 541 regulations is the version of these regulations that was in place on June 30, 2024, prior to the effective date of the 2024 rule, and which the Department has been enforcing.”

Thus, the final rule amends the Department’s part 541 regulations to reinstate the regulatory text promulgated in the 2019 final rule, as it appeared in the CFR immediately prior to the effective date of the 2024 rule.

“Put simply,” it explains, “this action is a technical correction accounting for changes in the law that have already occurred.”

Where does this leave things? On September 27, 2019, DOL explains, it published a final rule to increase the part 541 earnings thresholds from those set in the Department’s 2004 rule, raising the salary level from $455 per week to $684 per week (equivalent to $35,568 per year for a full-year worker). The rule also raised the highly compensated employee test’s total annual compensation requirement from $100,000 per year to $107,432 per year (of which $684 per week must be paid on a salary or fee basis).

Immediate effect. DOL determined that it has good cause to make this rule effective immediately upon publication. Therefore, the rule is effective as of May 15, 2026, which is the anticipated date of its publication in the Federal Register.

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